As per India rating Report; Idea Cellular and Vodafone merger margins up by approx. 3% points (by financial year 2019 )on cost synergies in networking and selling, general and administrative expenses, , while the total capital deployed will also rise by 90%.
Revenues are expected to be in Rs 77,500- 80,000 crore range along with a pretax profit margins of around 28%. Merger is taken as credit positive despite the facts of Reliance Jio’s aggressive posturing will continue to cause troubles in the near-term.
Idea being strong in rural and Vodafone being strong in Urban areas ,would collectively bring effective results.
According to the rating company agency,Spectrum holding limit is expected to be breached in five circles under the 900MHz band, one circle under the 1,800MHz band and two circles under the 2,MHz band with the cumulative worth of around Rs 9000 crore-based on last auctioned prices.
But merged entity may also face some operational as well as management control issues.