India's Department of Telecom has cleared Idea Cellular's request to allow 100% foreign direct investment (FDI) in the operator, paving the way for the merger between Idea and Vodafone India.
The approval will allow Idea to lift its direct and indirect foreign shareholding proportion for both the company and its subsidiaries Aditya Birla Telecom and Idea Cellular Infrastructure Services, the Economic Timesreported.
This marks one of the last required regulatory approvals required before the planned Vodafone-Idea merger closes. Subject to final approvals the deal is currently expected to complete in the fist half of the year.
Meanwhile Idea Cellular has called for a shareholder meeting later this month to discuss changing the name of the combined company to Vodafone Idea Limited, and to propose raising up to 150 billion rupees ($2.23 billion) via a new debt issuance.
The combined company is expected to leapfrog Bharti Airtel to become India's largest mobile operator by subscribers, with a customer market share of an estimated 42% compared to a revenue market share of 37%.
Due to recent amendments in spectrum cap rules, Vodafone Idea is now not expected to need to sell or surrender any airwaves as a result of the planned merger.