Vodafone pumps Rs 47,700 cr in India in response to Reliance Jio
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.
Managing Director and Chief Executive Sunil Sood told reporters today,
We've brought-in the largest FDI infusion ever...Rs 47,700 crore of equity infusion in country and this will help bolster the Vodafone India business
The money was invested by the parent starting April this year, and will be used to retire debt, bidding for spectrum, expanding business network and investments in technologies, he said.
The debt of Vodafone India, which is preparing for an Initial Public Offering (IPO), stands at Rs 29,000 crore, half of its capital base, as against a standalone net debt of Rs 81,500 crore at the end of March 2016. Incumbent telcom firms like Airtel, Vodafone and Idea have been on a warpath following entry of Reliance Jio with an investment of Rs 1.5 lakh crore on September 5 with offerings like free voice and comparatively cheaper data plans.
Also read : How Reliance Jio is going to affect the Indian online video ecosystem in the near future
Sood declined to give specifics on how the company plans to tackle heightened competition but said it will be launching a slew of offers starting next week. When asked about Jio, Sood said,
We believe that we have been here for the long term, we have been here for many years now as a company. We have 200 million subscribers and in the first quarter, we have gained 0.6 per cent market share. Vodafone India will do "whatever is required" for customers, including "affordable pricing".
Last week seven telcos, which applied to participate in the spectrum auction beginning October 1, have made earnest money deposit of Rs 14,653 crore to acquire rights to use spectrum in seven frequencies. Out of these Reliance Jio has alone deposited Rs 6,500 crore, followed by Vodafone India at Rs 2,740 crore. Sood said Vodafone India has always bid rationally and will continue with that strategy at the upcoming sale.
He dismissed the issue of problem faced by existing subscribers while porting out to Jio, saying such requests are going through and added that more dialogue between all the stakeholders is the way forward on contentious issues. Sood also said the incumbents' grouping COAI has written to the watchdog Trai, expressing concern over free calls.
