Vodafone and Idea merged their might in 2018 to take on the other telecom players in the market, but a "culture clash" within the organisation made the merger "devastating", Sunil Bharti Mittal has said. He said that he had warned at the time of the merger that it "won't work".

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"Vodafone Idea, at one point, had the largest market share, was rooted in India, and should have been a fabulous company," the chairperson of Bharti Enterprises said at an event at the Confederation of Indian Industry (CII).

Here's how the stock of Vodafone Idea moved in the last year:

Source: BSE

Mittal referred to Vodafone's style of operation as an "MNC culture", while he referred to Idea as a promoter-driven company. "Idea used to perform significantly better in terms of return on capital. Culture clash just did not work for Voda Idea," he said.

Also Read: Vodafone Idea Q4 consolidated losses narrow to Rs 6,563 cr

Speaking of the AGR (adjusted gross revenue) burden and spectrum issues, Mittal said, "We are now down to two and a half players for a big country like India." Jio is the another player in the telecom space.

In September 2020, the Supreme Court had asked telecom firms to pay the AGR dues in 10 instalments ending 2031. Mittal said that the AGR dues of nearly $6.5 billion were "backbreaking". He added that the burden, which was worse for Vodafone Idea, crippled them.

The Vodafone Idea merger was completed on August 30, 2018, after getting the final nod from the National Company Law Tribunal (NCLT) the previous day.

Vodafone Idea revenue since 2018 (after the merger):

Commenting on Vodafone Idea's difficulty in raising funds, Mittal said, "For last two years, Vodafone Idea has been talking about raising money, but nothing has materialised so far."

Also Read: Govt's Rs 16k cr dues conversion into 33% stake to be completed in coming weeks: VIL CEO

Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.

First Published:May 13, 2022 12:13 PM IST