Vodafone gets ₹47,700 cr to counter Reliance Jio
- The second largest telcom firm Vodafone India received ₹47,700-crore fresh capital from its parent to fund business expansion.
- The funds will be used to retire debt, bidding for spectrum, expansion of network and deployment of next generation technologies.
- This is the single-largest FDI inflow into the country till date
Amid a hyper-competitive market following the entry of Reliance Jio, the second largest telcom firm Vodafone India said it has received ₹47,700-crore fresh capital from its parent to fund business expansion.
"The money (₹47,700 crore) has flown into the company, which previously announced a plan to do a share sale, since April this year," Managing Director and Chief Executive Sunil Sood told reporters here.
He also claimed that this is the single-largest FDI inflow into the country till date.
The funds will be used to retire debt, bidding for spectrum that begins next week, expansion of network and deployment of next generation technologies, Sood informed.
The company's debt stands at "around ₹25,000" crore at present, and it is half of the company's equity, the MD said.
Declining to divulge any specifics on the IPO, Sood said the firm is continuing to prepare for the share sale on "full steam".
The company's total customer base has touched 200-million mark, he said, adding that 106 million of are in rural areas.
Till now, Vodafone has invested a total of Rs 1,15,500 crore in the country since 2007 and has 1,37,000 sites.
Incumbent telcom firms like Airtel, Vodafone and Idea have been on a warpath following the entry of Reliance Jio with an investment of ₹ 1.5 lakh crore, and offering services such as free voice and cheaper data plans.
Last week seven telcos, which applied to participate in the spectrum auction beginning October 1, have made earnest money deposit of ₹14,653 crore to acquire rights to use spectrum in seven frequencies. Out of these Reliance Jio has alone deposited ₹6,500 crore, followed by Vodafone India at ₹2,740 crore.
The government has set an ambitious target of mopping up over ₹5 lakh crore from the process.
Earnest Money Deposit (EMD) is indicative of a company's strategy to bid in specific circles and spectrum bands. It gives them eligibility points with regard to those circles.
The Finance Ministry in the Budget pegged the revenue target at Rs 98,995 crore from the telecom space, which includes ₹64,000 crore from the auction of about 2,354.55 Mhz of spectrum and the rest from various levies and services this financial year.