New Delhi, March 20: The highly speculated merger between telecom biggies Vodafone India and Aditya Birla group firm Idea Cellular was finally announced on Monday morning, sending waves across the telecom sector. As per the deal, Vodafone will hold 45.1 per cent in the combined entity, the Aditya Birla Group 26 per cent and IDEA’s minority shareholder will have 28.9 per cent stake. The AB Group will have the right to buy 9.5 per cent stake in the entity at Rs 130 per share. According to the agreement, Kumar Mangalam Birla will be the Chairman of the new entity.

The combined entity is expected to create India’s largest telecom firm with a revenue share of around 40 per cent and a subscriber base of over 380 million, according to India Ratings and Research.

The merger comes at a time when Reliance Jio as disrupted the telecom sector offering extremely lower rates for voice calling and data services. Jio, under its Happy New Year and Prime offers gave subscribers free data and voice calling services, registering a user base of 100 million in just five months. Following this, competition in the telecom sector has intensified. Airtel and BSNL have also entered the fray with free data offers.