- Firms in talks to buy a stake in struggling telco for more than $4 billion.
- Vodafone Idea says that its board will meet tomorrow to weigh fundraising plans.
Amazon.com Inc. and Verizon Communications, the largest wireless carrier in the US, are set to resume talks to buy a significant stake in struggling Vodafone Idea Ltd for more than $4 billion.
The stake-sale talks were paused because the outcome of a Supreme Court case on staggered payments of government dues was uncertain and could have threatened the survival of Vodafone Idea.
Supreme court to give telcos 10 years to pay a total of Rs 1.4 trillion in dues paves,which open the way for a resumption of the negotiations.Vodafone Idea to pay government dues and invest in upgrading its network,process that was halted for lack of funds.
Of the combined dues of all telcos, Vodafone Idea alone needs to pay around Rs 50,400 crore more to the government in licence fee, spectrum usage charges, interest and penalties.It has already paid Rs 7,854 crore.The company reported a staggering loss of Rs 25,460 crore in the June quarter due to one-time charges, including provisions to cover payments due to the government.
On Tuesday, report say that the company is resuming talks with financial and strategic investors, citing senior company officials.In a late-night filing on Tuesday, Vodafone Idea said that its board will meet on 4 September to consider proposals for fundraising.
While Amazon has a major presence in India, Verizon is present in India through its media and online unit Oath Inc.The US wireless carrier has also partnered with Bharti Airtel Ltd in the past and, most recently,in July, when it launched the BlueJeans video-conferencing service in India to serve business customers.
Earlier this year, reported that Google was in talks to acquire a 5% stake in Vodafone Idea.Google, however, decided to invest $4.5 billion in its rival, Jio Platforms, the digital arm of Reliance Industries Ltd.Technology and telecom analysts have already stated that the Jio-Facebook-Google deals would only increase the pressure on rival telecom companies to forge similar partnerships.
While Vodafone Idea will not compete with Reliance Jio on the range of offerings, it will expand its connected ecosystem theme to include products and services that go beyond telephony, according to the people cited above.
Bharti Airtel Ltd and Vodafone Idea lost 4.7 million subscribers each in May,while Reliance Jio Infocomm Ltd added 3.7 million users,according to Telecom Regulatory Authority of India (Trai) data.Jio Platforms, which includes all of Reliance Industries’ digital assets, has raised Rs 1.18 trillion by selling a 25.24% stake to a clutch of investors, including Facebook Inc, Google, Qualcomm and private equity companies such as General Atlantic, KKR and Vista Equity partners, among others, since April.
