Vodafone-Idea merger: Telecom market to stabilise, grow at robust pace, says DoT secretary

Telecom Secretary Aruna Sundararajan today termed the Vodafone-Idea Cellular merger as a "big milestone", and said it will bring robust growth as also stability to the Indian telecom market which is good news for consumers.

"We expect that with this merger, the market will begin to stabilise. We expect to see robust growth in the telecom sector with the emergence of three strong private sector players, and one public sector player," Sundararajan told PTI.

Government today gave final approval to the mega merger of Vodafone and Idea Cellular which creates India's largest mobile operator with about 35 per cent market share and nearly 430 million subscribers.

The new telecom behemoth -- Vodafone Idea Limited -- will dislodge Bharti Airtel, the current market leader with 344 million customers from its pole position.

Seeking to allay concerns that consolidation may lead to monopolisation or cartelisation in the Indian telecom sector, Sundararajan pointed out that US, China and Europe and other comparable markets operated with three players and that India was no different.

"This is a long awaited merger and also a big milestone in the history of mergers in the country. Each player is a strong corporate, and I believe there will be more than enough competition, and good news for consumers," she said.

She exuded confidence that the three companies will continue to infuse investments and come out with varied offerings to differentiate themselves in the market.

"We want them to stay engaged in the Indian market," she said.

The merger is expected to bolster the efforts of the debt-ridden firms Idea Cellular and Vodafone to take on the intense competition in the market where entry of Reliance Jio -- backed by India's richest man Mukesh Ambani -- has led to a bruising tariff war.

Asked if the DoT's final approval for merger came with certain riders, Sundararajan said these were routine in nature, including the one which required companies to abide by the decisions of the courts with regard to payments made.

Also, as and when the new company is formed, the bank guarantees of Vodafone will move over to Idea Cellular, she said.