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Idea shareholders approve merger with Vodafone; Reliance registers 12.5% profit growth

Coming at the heels of the acquisition of Tata Teleservices by Bharti Airtel, the proposed merger of Idea Cellular with Vodafone India has been approved today by the shareholders of Idea Cellular. This paves the way to form yet another giant in the telecom sector in India. The deal was approved by more than 99 percent of the shareholders of Idea Cellular. Now, the only permission required is from the National Company Law Tribunal (NCLT). After the shareholders approval, Idea’s shares surged almost 6 percent to close at Rs 78.90. The deal will make the combined entity the largest telecom company in India with a subscriber base of around 39 crore. Currently, Bharti Airtel is the largest telecom company in India. The Idea-Vodafone combine will command 43 percent of the revenue market share.

Meanwhile, the other emerging competitor in the market, Reliance Industries, has posted 12.5 percent increase in its net profit for the second quarter ending September 30, 2017. The increase in profits has come primarily from higher margins in core refining and petrochemicals business. The profits jumped to Rs 8109 crore in July-August quarter. The profit was 7209 crore in the year ago period. Revenue has also witnessed a growth of 16.5 percent in the second quarter of financial year 2017-18. However, Jio, the telecom division of Reliance Industries has posted a net loss of Rs 271 crore in the second quarter. This was expected since the company has been providing dirt-cheap calling and data plans to its customers.

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