Vodafone and Idea to merge; but only once they have cleared their dues

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With the recent entry of giant telecom company Reliance Jio Telecom in the Indian market, which has pushed aside its competitors in a short span of time with their die-for deals – that have lured a good portion of the Indian population, India’s number 2 and number 3 telecom providers – Vodafone India and Idea Cellular are all set to merge – one that would see them pass Reliance Jio and Airtel as the leading telecom company in the country. According to sources, following the merge, the company will be leading the way with 410 million customers, holding 37% of the total revenue market share (RMS) and 42% of the customer market share (CMS). However, while both the telecom service providers are all set to join hands and lead the telecom market, the telecom department (DoT) has asked both the telecom service providers to clear their dues before they even think of the merge.

Vodafone India-Idea Cellular
Vodafone and Idea told to clear their dues to the Telecom Department as a pre-condition to merge

According to a source, the telecom companies collectively have dues worth $3 billion (Rs.18,870 crores) to be paid to the telecom department. Based on the estimate of the Telecom Department, both the service providers have to clear their spectrum usage charges (SUC) and the one-time spectrum charges (OTSC) before even thinking of carrying out the merger. Talking numbers, the spectrum usage charges of Vodafone India amounts to Rs.5,532 crore, while their pending one-time spectrum charges amount to Rs.3,600 crore. On the other hand, Idea’s spectrum usage charges amount to Rs.7,625 while their one-time spectrum charges amount to Rs.2,113 crore. Sources claim that the Government of India will not be involved in the matter of both these telecom giants clearing the dues to the Telecom Departments, and it’s the job of the Telecom Department to take care of the matter and collect their dues worth almost Rs.19,000 crore as a pre-condition of the merger.

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