Vodafone Idea clarifies on reports of Google eyeing a stake in company

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Google may acquire stake in Vodafone Idea

2 min read . 10:39 AM ISTRomita Majumdar

An investment in Vodafone Idea will pit the US internet giant in a battle against the Facebook-Jio combine for the world’s fastest-growing mobile market, according to the Financial Times, which first reported the news

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MUMBAI : Google Inc. is considering picking a stake of about 5% in Vodafone Idea Ltd, said a person aware of the development.

The telecom joint venture of Vodafone Group Plc and the Aditya Birla Group is also in talks with private equity firms for potential investments, the person said seeking anonymity.

A spokesperson for Vodafone Idea did not comment while Google did not immediately respond to emailed queries.

According to the average price of the Vodafone Idea stock in the past two weeks, a 5% stake sale could fetch the company around $101.5 million. The stock has lost more than 57% in the past 12 months. To be sure, an eventual deal could happen at a significant premium to the recent stock price.

Google’s interest in Vodafone Idea comes at a time of financial stress on the Mumbai-based company amid cheap mobile tariffs and strong competition that intensified with the entry of Reliance Jio Infocomm Ltd in September 2016.

An investment in Vodafone Idea will pit the US internet giant in a battle against the Facebook-Jio combine for the world’s fastest-growing mobile market, according to the Financial Times, which first reported the news earlier in the day.

Facebook last month announced a $5.7 billion investment in Vodafone Idea’s rival Jio Platforms, which houses the digital assets of Reliance Industries Ltd.

So far, telecom and internet firms were independently trying to woo the Indian data user base, but the Jio-Facebook deal has paved the way for larger possibilities.

While globally Microsoft, along with Amazon Web Services, dominates the on-demand cloud computing platforms and application programming interface business, it faces a three-way fight in India, including Google Cloud. All of these providers are rapidly trying to reach both the market of “new to digital" businesses, legacy enterprises and the talent pool required to run it, and a partnership with a telco can give them immediate access to millions of subscribers.

Vodafone Idea owes the Indian government ₹53,000 crore in adjusted gross revenue dues. It posted losses of ₹6,453 crore in the December quarter. Revenue in the period rose 2.26% to ₹11,089.4 crore, thanks to 4G customer additions and improvement in average revenue per user. Ebitda, or earnings before interest, taxes, depreciation and amortization, increased marginally to ₹3,420.5 crore, while Ebitda margin fell 47 basis points to 30.84%. Vodafone Idea has not announced its March quarter earnings.

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Home > Companies > News > Vodafone Idea clarifies on reports of Google eyeing a stake in company

Vodafone Idea shares were up 15% in late trade

Vodafone Idea clarifies on reports of Google eyeing a stake in company

1 min read . 03:05 PM ISTWritten By Surajit Dasgupta

• Alphabet Inc's Google is looking to buy about 5% stake in Vodafone Idea, reports said
• Vodafone Idea shares had surged as much as 35% today

Vodafone Idea today clarified that "currently there is no proposal as reported by the media that is being considered at the board", with reference to reports that said that tech titan Google was eyeing a minority stake in the British telecom group’s struggling India business.

Reacting to the reports, stock of the company rallied about 35% at day's high on BSE.

The investment in Vodafone Idea will pit the search giant against Facebook which has picked up a stake in Jio Platforms, the firm that houses India's youngest but biggest telecom company - Reliance Jio.

Alphabet Inc's Google is looking to buy about 5% stake in Vodafone Idea Ltd, the Financial Times reported on Thursday.

The move assumes significance as Vodafone Idea - where Vodafone holds just over 45% stake - is staring at nearly ₹58,000 crore in unpaid statutory dues.

The BSE had sought clarification from Vodafone Idea with reference to reports. Vodafone Idea shares were up 15% in late trade.

Here is what Vodafone Idea said in a communication to exchanges:

"As part of corporate strategy, the Company constantly evaluates various opportunities for enhancing the stakeholders’ value. As and when such proposals are considered by the Board of Directors of the Company warranting disclosures, the Company shall comply with the disclosure obligations under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulation"). Currently, there is no proposal as reported by the media that is being considered at the Board.

We wish to reiterate and clarify the Company will comply with SEBI Listing Regulations and duly keep the stock exchanges informed of all the price sensitive information."

(With Agency Inputs)

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