Both Vodafone India and Idea Cellular are said to complete their merger by the end of August.
In order to expand its customer base, it has been reported that Vodafone and Idea may announce huge incentives to retailers. The move had come to beat the neck and neck competition from Reliance Jio and Bharti Airtel. According to a report in the Economic Times,Vodafone India and Idea Cellular are believed to have more than doubled the subscriber-related incentives offered to retailers.
Quoting a distributor, the report stated, "Vodafone and Idea’s retailers have been told that for every new customer, they will get Rs 180-250, depending on the recharge plan they manage to sell. Higher the recharge amount, more the incentive.
According to the publication, the latest incentive is more than double from the previous TRs 70-80 per customer that Vodafone India and Idea earlier offered.
Both Vodafone India and Idea Cellular are said to complete their merger by the end of August.
The merger of Vodafone India-Idea Cellular will create the largest mobile firm surpassing Bharti Airtel and leaving the telecom market with three private players – Bharti AIrtel, Vodafone Idea, Reliance Jio and a telecom PSU BSNL/MTNL. The merger will mark the end of the consolidation spree in the telecom market where many small players had to exit because of intense competition.
The combined operations of Idea and Vodafone will create the country's largest telecom operator worth over $23 billion with a 35% market share and a subscriber base of around 430 million.
Vodafone will own 45.1% stake in the combined entity, while Kumar Mangalam Birla-led Aditya Birla Group would have 26%and Idea shareholders 28.9%. Vodafone Idea will hold 1,850 MHz of spectrum, which included 1,645 MHz of liberalised spectrum acquired through auctions.
The Aditya Birla Group has the right to acquire up to a 9.5% additional stake from Vodafone under an agreed mechanism with a view to equalising the shareholdings over time If Vodafone and the Aditya Birla Group's shareholdings in the combined company are not equal after four years, Vodafone will sell down shares in the combined company to equalise its shareholding to that of the Aditya Birla Group over the following five-year period. Until equalisation is achieved, the voting rights of the additional shares held by Vodafone will be restricted and votes will be exercised jointly under the terms of the shareholders' agreement.
Birla is proposed to be the non-executive chairman of the merged entity and Balesh Sharma new CEO. Idea's chief financial officer Akshaya Moondra will head the financial operations of the new entity as its CFO. Ambrish Jain, currently the deputy MD at Idea Cellular, is set to become the new chief operating officer.
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 "To beat Reliance Jio, Vodafone and Idea may announce huge incentives to retailers")
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