India’s Department of Telecommunications has reportedly given Vodafone the green light to merge four of its local units some three years after the UK-based mobile operator initiated the transaction. However, the process is far from complete.
India’s Department of Telecommunications (DoT) has reportedly given Vodafone (LON:VOD) the green light to merge four of its local units some three years after the UK-based mobile operator initiated the transaction.
The Press Trust of India cited an official source saying that Vodafone has deposited Rs20bn (US$301m), as directed by the country’s Supreme Court, and, as such, DoT has given it clearance to merge four local units into Vodafone Mobile Services.
According to local media, DoT has demanded Rs67bn (US$1bn) from the operator to cover spectrum and regulatory charges. The court arrived at the Rs20bn sum in late November as Vodafone had previously offered to make an interim Rs17.7bn (US$267m) payment to move the merger process forward.
According to a Financial Times report in late November, Vodafone plans to contest the Rs67bn charge at the Telecom Disputes Settlement and Appellate Tribunal.
The PTI report stated that Vodafone now needs High Court approval to merge the units, after which it can complete the process by notifying the companies registrar.
In 2012, Vodafone sought to merge the four local units – Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink – into Vodafone Mobile Services, as part of IPO preparations, which are still on the backburner pending the resolution of tax disputes with the government. Vodafone Mobile Services is a unit of Vodafone India.
Vodafone is reportedly also looking to merge two other local units – Vodafone West and Vodafone Spacetel – into Vodafone Mobile Services. PTI cited an official source saying the operator will need to submit Rs19.5bn (US$292.3m) to merge these two entities.
The UK-based telecoms group confirmed in October that it has begun preparations for a listing of its Indian unit, the country’s second-largest telco. CEO Vittorio Colao (pictured) has said a final decision will be made next fiscal year. Vodafone has hired Rothschild to look into the viability of an IPO.
In November, following a meeting with Indian Prime Minister Nahendra Modi, Colao announced plans to invest an extra Rs130bn (US$2bn) into its Indian business.
Vodafone and DoT were not immediately available for comment.