Vodafone India likely to receive approval for the merger of its Indian unit but with riders

The Ministry of IT and Telecommunications plans to approve Vodafone India?s proposal of merging its various operating units, though with a few riders, say new reports.

According to an internal draft floated by the ministry, the government is of the view that Vodafone Plc?s Indian unit should not view the ?no-objection? as an approval for transfer of licences consequent to amalgamation of the companies. The communication in the draft suggests that that the proposal for transfer of licences may be submitted afresh by Vodafone India after the sanction of the scheme of merger/amalgamation by the High Court or tribunal concerned as the case may be.

Vodafone India operates through a number of subsidiary companies in India. It has proposed to merge Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink with Vodafone Mobile Services, and Vodafone West and Vodafone Spacetel with Vodafone Services. The restructuring proposals are pending with different High Courts for approval.

According to the note, the government has indicated that it has ?no objections? to the merger of the first four companies with Vodafone Mobile Services (VMS). However, all dues of the merging companies in a service area will have to be cleared by either party before permits to transfer licences are issued post-merger.

Further, VMS will have to undertake to pay all future dues, including anything remaining unpaid in the past by the merging companies. Spectrum held by the four companies and the airwaves charges payable will be subject to the rules applicable at the time of transfer.