In the midst of regulatory battles between telecom operators in the country, Vodafone India announced that it received an equity infusion of Rs 47,700 crore from its parent group in the first half of the current fiscal year.
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Ahead of a major spectrum auction, Vodafone has pumped in Rs 47,700 crore in its Indian arm since April to beef up its capital base amid growing competition in the telecom space with Mukesh Ambani-led Reliance Jio’s entry.
Seven telecom service providers, including Bharti Airtel, Vodafone India, Reliance Jio, Idea Cellular, Reliance Communications, Aircel and Tata Teleservices are participating in India’s biggest-ever telecom spectrum auction that will start from October 1. Analysts said that Vodafone has pushed the timeline further into the future on concerns over the local arm’s valuations in the wake of Reliance Jio’s disruptive pricing and its impact on the industry’s business model. The company’s debt stands at “around Rs 25,000” crore at present, and it is half of the company’s equity, the MD said.
“We are judiciously deploying a portfolio of technologies – 2G, 3G, 4G and IoT (Internet of Things) – to cater to the myriad connectivity needs of our retail and enterprise customers across the country”, Sood said. The company’s strongest markets – Delhi, Mumbai, Kolkata/West Bengal, Tamil Nadu/Chennai and Gujarat – will be included in the “direct markets” cluster.
Competition is expected to be especially intense in 4G, relatively new for India where telecoms services are one of the cheapest in the world and carrier’s margins are lower than in developed markets.
“We have 200 million subscribers and in the first quarter, we have gained 0.6 per cent market share”, Sood said, when asked about Jio. Declining to give a timeline for its debut in the primary market, the Indian company’s management merely said that it “continues to prepare” for a potential listing.
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Vodafone is in a long-running dispute over a tax demand of around Rs 20,000 crore, including penalties and interest, related to the acquisition of Hutchison’s stake in the company in 2007.
