Project On Merger

IDEA CELLULAR AND VODAFONE INDIA
A STUDY ON
MERGER OF IDEA CELLULAR AND VODAFONE INDIA
SUBMITTED BY:
DWARAKANATH M.B
Regd. No. – 1064-16-407-014
BADRUKA COLLEGE OF COMMERCE & ARTS

BACHELOR OF COMMERCE (HONOURS)
OSMANIA UNIVERSITY, HYDERABAD-500007
(2016-2019)
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A STUDY ON
MERGER OF IDEA CELLULAR AND VODAFONE INDIA
A Project submitted in partial fulfilment for the award of the degree of

BACHELOR OF COMMERCE (Honours)
Osmania University, Hyderabad – 500007
(2016-2019)
SUBMITTED BY
DWARAKANTH M.B
Regd. No. : 1064-16-407-014
Badruka College of Commerce & Arts, Hyderabad-27.
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DECLARATION
I, DWARAKANATH M.B, hereby declare that the project work titled “MERGER
OF IDEA CELLULAR AND VODAFONE INDIA ” is original work done by
me under the guidance of Ms.Deepa Jayadevan, Assistant professor – Commerce
submitted to the OSMANIA UNIVERSITY through Badruka College of
Commerce & Arts in partial fulfilment of requirements for the award of Bachelor
of Commerce. It is not submitted to any other University or Institution for the
award of any Degree/Diploma/Certificate.
DWARAKANATH M.B
(Name of the student) (Signature of the student)
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CERTIFICATION
This is to certify that the Project Report title “MERGER OF IDEA CELLULAR
AND VODAFONE INDIA” submitted in partial fulfillment for the award of the
B.COM program of Department of Commerce, O.U, Hyderabad, was carried out
by DWARAKANATH M.B under my guidance. This has not been submitted to
any other University or Institution for the award of any
Degree/Diploma/Certificate.
DEEPA JAYADEVAN
(Name of the guide) (Signature of the guide)
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ACKNOWLEDGEMENT
I would like to acknowledge the contribution of all the people and organization that
have directly or indirectly helped in the conceptualization and compilation of the
project report.
It is my privilege and pleasure to thank all the people associated with my college
Badruka College of Commerce & Arts, Hyderabad for providing an opportunity to
undertake a project report and completing it.
I extend my sincere thanks to Dr K.Someshwar Rao, Principal and Vice-principals

of BCCA for their contribution and assistance in completing the project report.
This project has been completed under the guidance of Ms.Deepa.J Asst. Professor
in commerce at Badruka College of Commerce & Arts for her immense co-
operation and consent encouragement through the endeavour.
I extend my thanks to librarian sir’s and computer lab technicians for being there
as a support in completion of tasks.
Last, but not least, I would like to acknowledge the patience and understanding of
my family throughout the project.
Date: (DWARAKANATH M.B)
Place: Signature of the student
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INDEX
S. NO. PARTICULARS PAGE NO.
1. CHAPTER - 1 : INRODUCTION 7-12
2. CHAPTER - 2 : REVIEW OF LITERATURE 13-14
3. CHAPTER - 3 : INDUSTRY PROFILE & 15-29

COMPANY PROFILE
4. CHAPTER - 4 : DATA ANALYSIS 30-41
5. CHAPTER - 5 : FINDINGS & CONCLUSIONS 42-51
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CHAPTER 1
INTRODUCTION
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INTRODUCTION TO MERGER:-
 Merger is a corporate strategy of combining different companies into

one in order to enhance the financial and operational strengths of
both organizations. Commonly done to expand companies reach,
Expand into New segments.
 A Merger is the combination of two companies into one by either

closing the old entities into one new entity or by one company
absorbing the other.
 A merger is a financial activity that is undertaken in a large variety of

industries: healthcare, financial institutions, private investments,
industrials and many more.
There are two main types of mergers:

 Horizontal Mergers :- Occur when two businesses in the same
industry combine into one.
 Vertical Mergers:- Occur when two businesses in the same value

chain or supply chain merge.
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INTRODUCTION TO VODAFONE INDIA:- ( Voice Data Fone)
Vodafone India was the second largest mobile network operator in India by
subscriber base, after Airtel with a market share of 18.42%. It has approximately
200 million customers as of August 2016.
 CEO : Sunil Sood

 Headquarters: Mumbai.
 Revenue : 425billion INR
 Founded : 16 September 1991.
 Parent
Organization : Vodafone.
The evolution of Vodafone Started in 1982 with the establishment of the Racal
Strategic Radio Ltd subsidiary of Racal Electronics, the UK’s largest maker of
military radio technology, which formed a joint venture with Millicom called
’Racal’ which envolved into the present day Vodafone.
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INTRODUCTION TO IDEA CELLULAR:-
Idea Cellular is an Indian mobile network operator based in Mumbai,

Maharastra. Idea is a pan-India integrated GSM operator offering 2G, 3G and 4G
mobile services. Idea was India’s third largest mobile operator by subscriber
base.
 Chairman : Kumar Mangalam Birla

 Head quarters : Santacruz, Mumbai
 Founded : 1995
 Revenue : 354billion INR
 Parent
organisation : Aditya Birla Group
*Note:- The New Company established after Merger i.e known

Vodafone-Idea limited and the CEO of the company after the merger is
Balesh Sharma.
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ADITYA BIRLA GROUP:
 Operations in 35+ countries
 History of 50+ years
 Presence across metals & mining, cement,

carbon black, textiles, garments, retail,
chemicals, fertilizers, insurance, financial
services industry, and mobile
telecommunications
 Ability to attract best-in-class talent
 Strong confidence of all stakeholders -

lenders, vendors and consumers
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IDEA CELLULAR:-
 Pan India Pure play Wireless Operator
 No.3 Operator in India with 16.2% RMS
 No.7 Ranked Operator in the world by number of Subscribers.
 Serving 203 million Subscribers
 US$ 5.2bn market Capitalisation.
 3.1 bn MoU per day, 6.2mm MB per day.
 Population Coverage : 82.2%
 Wireless Broadband coverage 52.4%
 FY17 Gross revenue US$ 5.5bn
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CHAPTER - 2
REVIEW OF LITERATURE
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REVIEW OF LITERATURE:-
 Merger of Idea & Vodafone India by Mrs. Vardha Mago
 Presentation on Merger between Idea & Vodafone by Daljeet Thakur
 Vodafone Idea Merger – Economic times
 Vodafone Idea Limited- Wikipedia
 Various journals on Idea-Vodafone Merger.
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CHAPTER -3
INDUSTRY PROFILE
&
COMPANY PROFILE
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MERGER DETAILS:-
On 20 march 2017, Vodafone India and idea cellular agreed to merge and create a
biggest telecom company in India with a customer base of over 394 millions.
Vodafone India own 45.1% entity after transferring 4.95 to the promoters of idea
cellular for Rs of 3874 crore in cash post the merger. The promoter of idea group
will hold 26% and the rest of shares will be owned by public so we can say that it
is an 50-50 partnership.
Through this merger both of companies became the countries largest players with
a revenue of market share of 43% leaving Bharti Airtel in the second slot with a
share of 33%.
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Vodafone-Idea Merger
March Announcement of Merger.
2017
July 1. Received approval from Competition

2017 Commission of India.
August 2. Received no objection letters from BSE and NSE

2017 Filed applications in NCLT (Ahmedabad and
Mumbai benches) for approval of merger.
3. Received share holders & creditors

October
4. Approval through NCLT meetings.
2017
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Key Highlights:-
1
Creation of India’s largest telecommunications
company
2
Equal partnership between Aditya Birla Group and Vodafone
Group
3
Strategic fit and complementary
assets
4
Significant synergies
5
Unlocking further value through monetisation of tower
assets
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OVERVIEW OF KEY APPROVALS:-
 Filing of Scheme with Stock Exchanges and SEBI for approval
 Apply for regulatory approvals (CCI, DoT, RBI, FIPB (if applicable))
 Filing of Scheme with NCLT
 Shareholder and creditor meetings
 Scheme approved byNCLT
 Regulatory approval
 Listing approval
 The transaction is subject to regulatory approvals and is likely to

be completed during CY 2018
Proposed combination will be the eighth applicant in recent

times to seek approval of Department of Telecommunications
(DoT) under Government policy initiatives such as spectrum
sharing, spectrum trading and revised M&A guidelines announced
since 2014. The DoT has already approved four spectrum sharing
/ trading transactions and three other M&A transactions are in
various stages of regulatory approval.
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NEED OF MERGER:-
The need of merger arises to get full benefit of the synergy and with
synergy benefit it results in higher profits and leverage expected to
reduced, the combined entity’s equity valuation also rises.
Also the market share and the number of customers also increased
through this mergers which ultimately provide boost in the revenue of
both of the firms.
Through the merger market share and number of customers also

increases and provide boost in the revenue of both the firms.
Helps to reduce the effect of tariff war that generally occurs in telecom
Market. Both companies enjoy benefits in term of network and also in
Terms of service.
To become biggest telecom sector in India.
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HOLDING STRUCTURE OF IDEA BEFORE MERGER:- (2016)
Idea
promoters public
42.45% 57.55%
IDEA
100% 100%
49% ABIPBL OTHER
ABTL SUBS
Payments
bank  ICISL
 ICSL
 ITL
 IMCSL
INDUS
TOWERS
ABTL - Aditya Birla Telecom limited ICSL- Idea cellular services limited
ABIPBL- Aditya birla idea payments bank limited IMCSL- Idea mobile commerce services limited
ICISL- Idea cellular infrastructure services limited
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HOLDING STRUCTURE OF VODAFIONE BEFORE MERGER (2016)
VODAFONE INDIA
VODAFONE
100%
100% Transaction parameter

VMSL VIL
42%
Subs /JVs of
VIL/VMSL Indus
towers
 M pesa
 You
broadband
 Firefly
 Support
services
VMSL- Vodafone mobiles services limited
VIL - Vodafone India limited
Firefly- Joint venture between Vodafone and bharthi Airtel to provide Wifi hotspots
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RESULTING STRUCTURE AFTER MERGER:-
Merged entity
Mobility(1) Towers Payments Bank(3) Other Subs / JVs
• Captive towers and

tenancies(2)
• Idea:8,886/15,418 • Idea Money
• Vodafone(1): • M-Pesa • You Broadband(4)
• Both mobility 10,926/15,846 • Aditya Birla Idea • Firefly
businesses • Idea’s 11.15%stake in PaymentsBank • Other subsidiaries
Indus
• Aditya Birla Group to acquire 4.9% stake of merged entity from Vodafone for ~INR 39bn in cash, concurrent with
completion – reaching a shareholding of 26.0%
• Aditya Birla Group has the right to acquire up to 9.5% additional shareholding from Vodafone Group
• Captive towers and Idea’s 11.15% stake in Indus Towers to be monetized to unlock value
Notes:
1. Represent divisions
2. Towers and tenancies as of December 2016, excluding IBS / CoW / MSCs 9
3. The finalmerged entity will holdone payment bank license(including digital wallets)as per presen t guidelines. The exact structure and shareholding is under discussion and willbe announced separately
4. Vodafone has acquired You Broadband. The transaction is subject to completion
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PRINCIPLES OF PARTNERSHIP:-
1
Equal Partnership
2
Board Composition
3
Key Management
4
Shareholding
Equalisation
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1. EQUAL PARTNERSHIP:-
• Idea promoters and Vodafone Group will be joint promoters of the combined entity
• Equal affirmative rights to both promoters on key matters
2. BOARD COMPOSITION:-
• 12 member board with 6 independent directors

• Equal representation from Aditya Birla Group and Vodafone Group
• Chairman: Mr Kumar Mangalam Birla
•
3. KEY MANAGEMENT:-
• CEO&COO–“Bestpersonforthejob”–jointappointment
• CFO – Vodafone to appoint
4. SHARE HOLDING EQUALIZATION:-

• Aditya Birla Group has the right to acquire upto 9.5% additional shareholding from
Vodafone Group
• If equalization is not achieved, Vodafone Group to sellexcessstake
• Till equalization, voting on excess stake held by Vodafone to be restricted and exercised
jointly as per the agreement.
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HIGHLIGHTS OF COMBINATION:-
1 2
Largest Telecom Complementary
Operator Footprint
4
3
Wide Scale Highest Broadband
Network Capacity
5 6
Extensive Unparalleled
Distribution Service
Channel Infrastructure
7 8
Significant Business
Synergies Expansion
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1. Largest Telecom Operator:
 Creating India’s largest telecommunications company

 Combined Subscriber base of nearly 400 million
 Combined RMS of 40.7% and CMS of 35.1%
 Leadership position (#1 / #2 rank) in 21 (out of 22) telecom circles
2. Complementary Footnote:-
 Largest existing Mobile Voice population coverage of 1.1bn Indians

 Pan India Broadband currently covering ~ 650mn Indians; committed toreach 1.1bn
 Strong brand appeal across metro, urban, rural & deep interior markets
 New leadershippositions in 7 markets (incl.Delhi, UP (W), UP (E) & Punjab)
3. Wide Scale Network:-

• Deepest Pan India GSM network infrastructure of 273,000 GSM sites
• Rapidly expanding existing Mobile Broadband network spread ofover 189,000sites
• Release of overlapping equipment for expansion of mobile broadband services to uncovered
geographies
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4. Highest Broadband Capacity:-

• 163 mobile broadband carriers – highest amongst all operators
• 3G - Pan India 34 carriers with 2 carriers in 11 leadership telecom markets
• 4G-PanIndia129 carriers & capability to offer upto 250Mbps * in 12 Markets
• Large fiber network of approximately 2,50,000 kms.
• Ability to build large broadband capacity on existing spectrum
5. Extensive Distribution Channel:-
 Widest pre-paid reach through over 2 mn retailers

 Post-paid reach to Enterprise & Retail through 30,000‘FieldSalesTeam’
 Brandstrategywillbedevelopedinduecourseandwillleveragecustomers’ affinity forboth existing
brands,builtupoverthepast decade
6. Unparalleled Service Infrastructure:-
 Service footprint of 19,000 company branded stores

 More than 28,000 contact centre agents to serve 400mn Customers
 Managing daily volume of 2.3 mn consumer calls
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7. Significant Synergies:-
 Rationalization of operating expenses including Network Infrastructure & IT Services. Channel&

Service partner, brandefficiencies, etc.
 Reduced Network apex due to redeployment of overlapping equipment,

de-duplication of fresh equipment & spectrum consolidation
 Estimated NPV of net synergies of approximately INR 670 bn(1)
8. Business Expansion:-
 Higher participation in evolving Digital Services including Content

 Larger canvasfor PaymentBank Services to 400mnexisting mobile users
 Scale up presence in Fixed Line segment including FTTH, MPLS etc.
 Deeper penetration in the Enterprise – MNC, National, Regional & SMEs
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CHAPTER - 4
DATA ANALYSIS& INTERPRETATION
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COMPETITIVE REVENUE POSITION ACROSS 21 CIRCLES:-
Circle
Ide Vodafon Combine Idea Vodafon Combine
Circle share in
a e d RMS e RMS d
s Industry
RM RMS RMS Rank Rank Rank
Revenue
S
Maharashtra 8% 31.7% 24.3% 56.0% 1 2 1
Delhi 8% 11.7% 26.7% 38.4% 3 2 1
Mumbai 7% 8.9% 33.0% 41.9% 6 1 1
Uttar Pradesh (East) 6% 13.7% 28.0% 41.7% 3 2 1
Gujarat 6% 21.7% 36.9% 58.6% 3 1 1
Kerala 5% 38.7% 22.5% 61.2% 1 2 1
Madhya Pradesh 4% 41.7% 9.5% 51.2% 1 3 1
Uttar Pradesh (West) 4% 30.0% 21.8% 51.7% 2 3 1
Punjab 4% 23.7% 16.1% 39.8% 2 3 1
West Bengal 3% 9.2% 37.2% 46.3% 5 1 1
Kolkata 2% 7.8% 34.3% 42.1% 5 1 1
Haryana 2% 27.0% 28.2% 55.2% 2 1 1
Tamil Nadu 8% 6.4% 23.8% 30.2% 5 2 2
Karnataka 8% 11.3% 14.8% 26.1% 4 2 2
Andhra Pradesh 8% 23.0% 9.9% 32.9% 2 3 2
Bihar 5% 13.9% 14.3% 28.2% 3 2 2
Rajasthan 5% 12.9% 21.8% 34.7% 3 2 2
Orissa 2% 5.9% 16.6% 22.5% 6 2 2
Assam 2% 5.1% 22.7% 27.8% 5 3 2
North East 1% 4.2% 18.4% 22.6% 5 3 2
Himachal Pradesh 1% 11.8% 9.8% 21.6% 4 5 2
Jammu and Kashmir 1% 6.0% 10.0% 16.1% 5 4 3
Total 100% 18.1% 22.7% 40.7% 3 2 1
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WORLD’S 2nd LARGEST TELECOM OPERATOR SERVICING:(400mn subscribers)
Circle share
Idea Vodafone Combined Combined Idea CMS Vodafone Combined
Circles in Industry
CMS CMS EoP (Mn.) CMS Rank CMS Rank Rank
Subscribers
Maharashtra 8% 28.1% 20.8% 44.4 48.9% 1 3 1
Gujarat 6% 18.8% 28.9% 32.6 47.7% 3 1 1
Madhya Pradesh 6% 35.3% 10.2% 30.2 45.5% 1 4 1
Uttar Pradesh (West) 6% 24.8% 18.8% 27.5 43.6% 2 3 1
West Bengal 5% 11.2% 34.6% 25.4 45.8% 4 1 1
Delhi 5% 12.5% 20.7% 16.9 33.2% 4 3 1
Kerala 3% 29.1% 20.3% 18.7 49.4% 1 3 1
Punjab 3% 18.2% 14.5% 11.9 32.6% 2 3 1
Mumbai 3% 12.8% 25.9% 13.4 38.7% 4 1 1
Haryana 2% 21.1% 24.2% 10.8 45.3% 2 1 1
Uttar Pradesh (East) 9% 11.6% 19.4% 31.5 31.0% 4 2 2
Tamil Nadu 8% 7.4% 18.9% 22.8 26.3% 5 3 2
Bihar 7% 14.6% 11.8% 21.7 26.4% 2 4 2
Andhra Pradesh 7% 21.4% 8.6% 24.5 30.0% 2 4 2
Karnataka 6% 14.3% 11.8% 17.5 26.1% 2 4 2
Rajasthan 6% 12.4% 18.6% 20.2 31.1% 4 3 2
Kolkata 2% 9.0% 19.9% 8.1 28.9% 6 2 2
Orissa 3% 6.2% 13.3% 6.4 19.5% 5 4 3
Assam 2% 6.2% 18.7% 5.2 24.9% 5 3 3
North East 1% 5.0% 13.1% 2.2 18.0% 5 4 3
Jammu and Kashmir 1% 5.5% 8.7% 1.6 14.2% 6 4 3
Himachal Pradesh 1% 8.2% 7.5% 1.6 15.8% 4 5 4
Total 100% 16.9% 18.2% 395.2 35.1% 3 2 1
Market leadership in 10 markets contributing 47% of industry subscribers
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EFFECTS OF MERGER:-
REALIZING THE “DIGITAL INDIA’’ VISION.
DELIVERING BENEFITS FOR CUSTOMERS
CREATING VALUE FOR SHARE HOLDERS
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REALIZING THE “DIGITAL INDIA” VISION:-
(Transform India into a digitally

empowered society)
 Accelerate the availability of high-speed mobile broadband services through out india.
 Support sustained Investment to create a ‘’world class’’ Telecom infrastructure.
 Better Utilization of Natural Resources and creation of “Digital Highways”.
 Improved capability to offer Digital services including content and Transition.
 Drive Financial Inclusion through deeper penetration of Payment Banking and
Digital Wallet Services.
 Accelerate 4G/4G+/5G services across India
 Sustained and efficient investment to create a world class Indian telecom infrastructure
 Stronger financial inclusion through mobile payments
 Improved mass-market digital services in urban and rural areas
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DELIVERING BENEFITS FOR CUSTOMERS:-
(Deliver consumer benefits through combination

of networks &
spectrum holdings)
 Excellent Consumer experience & Industry leading coverage on back of
Complimentary footprint.
 Largest Broadband and voice capacity to Market Unlimited Voice plans & very large
Mobile Broadband Services
 Offer attractively priced services and innovative products in a competitive

Telecom Market.
 Best in class National & International Roaming Experience.
 Better Offerings of Enterprises across the country.
 Complementary footprint creates leading network coverage and capacity

 Scale ensures attractive prices and long- term, sustainable consumer choice
 Improved offerings for large enterprises, small businesses and the public sector
 Best-in-class customer experience across all segments
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CREATING VALUE FOR SHARE HOLDERS:-

(Ability to generate better returns)
 Substantial Opex & Capex synergies.
 Creating Stronger listed Business with a deep-spectrum Position-Accretive Transaction.
 Improved Return on Capital from Higher scale.
 Synergy benefits to enable faster de-leveraging of balance sheet.
 Improvement in overall consumer ARPU levels due to higher adoption of broadband and
Digital Services.
 Stronger, listed asset in India, with a deep spectrum position to deliver the capacity to compete
 Improved returns on capital from higher scale and substantial opex and capex synergies
 De-leveraging of the combined company’s and Vodafone Group’s balance sheets
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ADITYA BIRLA GROUP AND VODAFONE:- ( A Strong Partnership)
ADITYA BIRLA GROUP
Leading Conglomerate:-
 OneofIndia’smost respected and largest conglomerates with over 150 years of heritage.
 Aggregate Revenues of US$ 41bn.
Diversified Profile:-
 Proven track record of building leadership businesses across diverse industries

Including telecom, metals, cement, retail, fashion & life style, financial services etc..
Global Presence:-
 Operations across 30+ countries with large source of income.

 Large and Diverse man power of over 1,20,000 employees belonging to 42 nationalities.
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VODAFONE INDIA:-
Enterprise :-
 Leader in enterprise mobility internationally , popular in 73 countries.

 Global market leader in LOT.
Technology:-
 Key shaper of technology standards , chairman of NGMN alliance.

 Expertise mobile payments (M-pesa)
Procurement:-
 Best in class purchasing capability reflecting leading multi-country scale.

 Known for providing best consumer services across different countries.
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IMPLICATIONS OF VODAFONE GROUP FINANCIAL REPORTING:-
IFRS requires de-consolidation of Vodafone India immediately post announcement
 After completion, India to be accounted for as a joint venture:
JV reported under the equity method
Net debt de-consolidated, improving proforma leverage ratios by around 0.3x2

Accretive to Group cash flow post spectrum payments from the first full year post closing
 FY2016/17 guidance unchanged, continues to include India
 Going forwards, guidance to exclude India, consistent with local market practice
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VODAFONE AND IDEA (THE LARGEST INDIAN TELECOM COMPANY):-
 Highly complementary footprint and coverage:-
 Metro, urban and rural markets

 Broadest coverage: 273k 2G sites2, 189k 3G/4G sites
 Competitive spectrum portfolio and broadband coverage:-
 1,850 MHz, premium 900 MHz in 17 circles

 163 3G/4G carriers, up to 250mbps in 12 circles
 Extensive distribution channels and unparalleled service

infrastructure:-
 Over 2m retailers
 19k branded stores and 28k contact centre agents
 Full digital services to Indian consumers and businesses:-

 Mobile payments, IoT, advanced enterprise offerings and entertainment services
 Substantial cost and capex synergies:-

 Estimated NPV of US$10bn
 $2.1bn annual run rate in 4th year
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MARKET SHARE OF TELECOM COMPANIES:-
Revenue Market Share Total Spectrum

VLR Subs
399 344 124
(mn)(3)
37.5% 37.3% 1,976
40% 1,850
1.8%
4.3% 1,480
30%
21.3%
20%
31.2%
10%
16.2%
14.5%
0%
Industry has consolidated at a rapid pace with only 4

major operators remaining compared to 14 operators
in 2011
14.5%
Combined marketsharefor Top 3 playershas
increased from65.5%in December 2008 to 89.3% as
of September 2017(4)
37.3% Rapid adoptionof smartphones and lower access
Top 3
costsleadingto explosion in data consumption
RMS
89.3%
37.5%
Others
10.7%
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CHAPTER - 5
FINDINGS & CONCLUSIONS
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NEW EMERGING BUSINESS:-
Digital Services
• Bouquet of digital services to catalyse mobile data demand

• Strong offerings across categories such as Digital Entertainment (incl. Movies, Music,
Games, Live TV), VoIP and VoLTE, Information and Cloud
& Storage Services
Payments Bank
• Launch of Payments Bank services, with power of domain expertise

• Canvas of 400mncustomers andglobal expertiseof M-pesaavailable for Digital
Wallets
Fixed Line Offerings
• Expansion of Fixedlineofferings –Enterprise Wireline,ILL,MPLS,etc.

• Introduction of latest broadband solutions suchas FTTH,Wi-Fi,etc.
• Deeper penetration in Enterprise SegmentacrossMNC,Large& SMEclients
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SIGNIFICANT ESTIMATED SYNERGIES OF ~INR 670 bn:-
NETWORK
 Rationalization of co-locatedsitesfollowingnet work consolidation(~20%)

 Energysavings&operationalefficiencieswitheliminationofolderGSMsites
Savings related to small cells, IBSand connectivity cost.
Customer
Acquisition &
Servicing
 Service centres, back officeand distribution efficiencies
 Infrastructure sharing and resulting in lower cost
Brand Advertising &

others
Combined advertising & business promotion
 Leverage strong affinity of two powerful decade old brands
 Reduction in General & Other administrative expenses
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LEADER SHIP POSITION ACROSS INDIA:-
Leadership position across India…

Circles where Vodafone / Idea hold #1 or #2 positions based on RMS, Q3 FY 2017
Rank1 (60%Ind. Rev)
Rank2 (39%Ind. Rev)
Rank 3 (1% Ind. Rev)
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Rank1 (60%Ind. Rev)

Largest customer base with a competitive spectrum portfolio:-

Customers AsatQ3FY2017(m)
395
320
191
205 191 183
100
205 72
53
2
Vodafone-
Idea
Customer market share (Q3 FY 2017)
35% 28% 18% 17% 16% 9% 6% 5%
Spectrum Total spectrum holdings

post Oct-2016 auction (MHz)1
1,850
1,489
891
1,235
984 958 891 883
958 387
2 3
Vodafone-
Idea
Share of spectrum1
27% 22% 18% 14% 14% 13% 13% 6%
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Market leader in revenue and EBITDA:-
Gross revenue1 FY 2016 (US$bn)
12.1
9.8
5.4
6.7
5.4
3.4
6.7 2.7
1.9
2
Vodafone-
Idea
Gross revenue market share (FY 2016)
40% 32% 22% 18% 11% 9% 6%

EBITDA FY 2016 (US$bn)
3.7
3.3
1.8
2.0 1.8
2.0
0.5
n.a.
3
Vodafone-
Idea
Scope for margin improvement through increased scale and synergies

47 | P a g e
GOALS AFTER THE MERGER:-
 Expand Broadband coverage and capacity:-
 Expand coverage to 1 bn Indians

 Re-deployment of overlapping 3G& 4G sites
 Built Capacity
 RolloutTDDspectrumin 2300 / 2500 MHz in dense areas
 Spectrum refarming from 2G to 4G
 Build portfolio of New age offerings:-
 Create one-stop entertainment platform through digital content

applications
 Mobile apps across categories of Music, Games, Movies, News
and Magazine etc.
 Targeted digital services in developing sectors like agriculture, health,
education etc. through M2M communication and LoT for growth
in enterprise business.
 Roll-out VOLTE:-
 VOLTE to be introduced starting end of FY2018 and to be offered

along with the existing circuit switched voice services.
 Optimize spectrum utilization between voice and data services to
enhance customer Experience.
48 | P a g e
 Capture Incremental Growth, High ARPU subs:-
 Capture incremental subscriber growth – Competitive share on 4G and larger

share on 2G
 Focus on highARPU customers throughunlimitedbundle customer growth
and attractive postpaid plans
 Counter handset strategy with cash backs on 2G & 4G
 Encourage digital buying and bring down distribution cost.
 Derive Synergies:-
 Opportunities to realize opex and capex synergies including the

following:
 Rationalization and surrender of over 60,000 overlapping sites
 Overlapping 3G and 4G sites to be used to expand broadband coverage
 Consolidationof spectrumleadingtoincreasednumber of broadband carriers
 Fixed line and Home broadband
 Utilize robust, nationwide last mile fiber infrastructure to offer fixed line and
broadband services to homes and enterprises
 Focus on enterprise broadband segment – MPLS, ILD, Video conferencing etc.
49 | P a g e
RESEARCH DESIGN & METHODOLOGY:-
Descriptive Design in the study of Merger between Idea Cellular & Vodafone India.
DATA TYPE:-
 Secondary Mode Of Data Collection

 Data from Social Media
 Various Journals
 News papers
50 | P a g e
BIBLIOGRAPHY:-
 www.wikipedia/idea-vodafone-merger
 Economictimes.Indiatimes.com/Vodafone-idea-merger
 www.google.com
51 | P a g e
THANK YOU
52 | P a g e

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IDEA CELLULAR AND VODAFONE INDIA

Regd. No. – 1064-16-407-014

BADRUKA COLLEGE OF COMMERCE & ARTS

MERGER OF IDEA CELLULAR AND VODAFONE INDIA

A Project submitted in partial fulfilment for the award of the degree of

(Name of the student) (Signature of the student)

(Name of the guide) (Signature of the guide)

I extend my sincere thanks to Dr K.Someshwar Rao, Principal and Vice-principals

Date: (DWARAKANATH M.B)

Place: Signature of the student

1. CHAPTER - 1 : INRODUCTION 7-12

2. CHAPTER - 2 : REVIEW OF LITERATURE 13-14

3. CHAPTER - 3 : INDUSTRY PROFILE & 15-29

4. CHAPTER - 4 : DATA ANALYSIS 30-41

5. CHAPTER - 5 : FINDINGS & CONCLUSIONS 42-51

 Merger is a corporate strategy of combining different companies into

 A Merger is the combination of two companies into one by either

 A merger is a financial activity that is undertaken in a large variety of

There are two main types of mergers:

 Vertical Mergers:- Occur when two businesses in the same value

INTRODUCTION TO VODAFONE INDIA:- ( Voice Data Fone)

200 million customers as of August 2016.

 CEO : Sunil Sood

INTRODUCTION TO IDEA CELLULAR:-

Idea Cellular is an Indian mobile network operator based in Mumbai,

 Chairman : Kumar Mangalam Birla

*Note:- The New Company established after Merger i.e known

ADITYA BIRLA GROUP:

 Operations in 35+ countries

 History of 50+ years

 Presence across metals & mining, cement,

 Ability to attract best-in-class talent

 Strong confidence of all stakeholders -

 Pan India Pure play Wireless Operator

 No.3 Operator in India with 16.2% RMS

 No.7 Ranked Operator in the world by number of Subscribers.

 Serving 203 million Subscribers

 US$ 5.2bn market Capitalisation.

 3.1 bn MoU per day, 6.2mm MB per day.

 Population Coverage : 82.2%

 Wireless Broadband coverage 52.4%

 FY17 Gross revenue US$ 5.5bn

 Merger of Idea & Vodafone India by Mrs. Vardha Mago

 Presentation on Merger between Idea & Vodafone by Daljeet Thakur

 Vodafone Idea Merger – Economic times

 Vodafone Idea Limited- Wikipedia

 Various journals on Idea-Vodafone Merger.

March Announcement of Merger.

July 1. Received approval from Competition

August 2. Received no objection letters from BSE and NSE

Mumbai benches) for approval of merger.

3. Received share holders & creditors

OVERVIEW OF KEY APPROVALS:-

 Filing of Scheme with Stock Exchanges and SEBI for approval

 Filing of Scheme with NCLT

 Shareholder and creditor meetings

 Scheme approved byNCLT

 The transaction is subject to regulatory approvals and is likely to

Proposed combination will be the eighth applicant in recent

Through the merger market share and number of customers also

To become biggest telecom sector in India.

HOLDING STRUCTURE OF IDEA BEFORE MERGER:- (2016)

ICISL- Idea cellular infrastructure services limited