Comments
To get a foothold in India’s telecom market, internet giant Google has initiated discussions to acquire up to 5 per cent stake in Vodafone Idea Ltd (VIL). The move, if successful, would also help the American company compete with Facebook in the world’s fastest growing telecom market.
Alphabet, the parent company of Google and Nest, among others, has held a couple of rounds of discussions with VIL. Many other investors have also evinced interest in acquiring a stake in the operator, sources close to the development told BusinessLine .
They, however, did not immediately reveal the names of other investors VIL was in talks with. Financial Times was the first to report on this development on Thursday.
Mails to Google and VIL did not elicit any response.
Google would be interested in additional stake, but it would all depend on the valuations, they added.
On May 12, Vodafone Group said its potential exposure to the Indian telecom joint venture VIL is capped at ₹8,400 crore (€1 billion).
In July 2018, Vodafone Group had entered into an agreement with Idea Cellular, an Aditya Birla Group company, to merge Vodafone India and Idea Cellular.
Later in November 2019, Vodafone Group CEO Nick Read had cast doubts over its Indian operations unless the government stopped hitting operators with higher taxes and charges. In December that year, Aditya Birla Group Chairman Kumar Mangalam Birla said VIL will have to “shut shop" if there was no relief from the government.
AGR burden
This followed a Supreme Court ruling that telcom operators had to pay ₹1.47-lakh crore as adjusted gross revenues (AGR) to the government. VIL’s AGR liabilities were at ₹53,038 crore.
On April 22, the group announced that it had made an advance payment of $200 million to Vodafone Idea for amounts likely to be due in September 2020.
Vodafone Group has now extended the long stop date on its agreement to merge Indus Towers (a three-way joint venture between Bharti Infratel, Vodafone Idea and Vodafone Group) and Bharti Infratel to June 24.
On April 22, global tech giant Facebook had signed a binding agreement to invest ₹43,574 crore in Reliance Industries Ltd’s wholly-owned subsidiary Jio Platforms.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.