Vodafone Group Plc won the Indian cabinet's approval for its $1.6 billion deal to buy out minority partners in its unit in the country, Information and Broadcasting Minister Manish Tewari said on Thursday.
British telecom major Vodafone has raised its stake in debt-ridden Vodafone Idea Limited to 47.61 per cent through its subsidiary Prime Metals, a regulatory filing said on Monday. The company earlier held 44.39 per cent stake in Vodafone Idea Limited (VIL). "Prime Metals held 2,18,55,26,081 equity shares, representing 7.61 per cent of the equity share capital, of Vodafone Idea Limited (the "company").
The government may be waiting for the outcome of an arbitration initiated against its levy of Rs 10,247 crore retrospective tax on UK's Cairn Energy Plc before deciding on appealing against losing a tax case against Vodafone Group, sources said. An international arbitral tribunal is expected to give a decree within next few days on Cairn Energy Plc's challenge to the Indian government seeking Rs 10,247 crore in retrospective taxes. If the arbitration award in the Cairn cases goes against India, the government has to pay the British firm over Rs 7,600 crore to reverse the dividend and tax refund it had ceased and shares it sold to recover part of the tax demand.
In India, there are 22 services area, or circles, for 2G telecom services and both the companies operate in all the circles.
If he bets big, billionaire Mukesh Ambani will emerge from this week's airwave auction armed with spectrum that could make his Reliance Industries Ltd a formidable rival to market leaders Bharti Airtel Ltd and Vodafone Group.
In 2013-14, India became the third-largest contributor to Vodafone Group's service revenue and operating free cash flow.
The price offered is about a quarter of the value set by the govt in an auction that was scheduled for March 2013 but never took place.
The Indian mobile market has been witnessing a rate war with the entry of new players
Vodafone is facing tax liability over its $11 billion acquisition of a 67 per cent stake in the mobile-phone business owned by Hutchison Whampoa in 2007.
Debt-ridden Vodafone Idea (VIL) has decided to opt for converting about Rs 16,000 crore interest dues liability payable to the government into equity which will amount to around 35.8 per cent stake in the company, as per a regulatory filing of the telecom firm. If the plan goes through, the government will become the biggest shareholder in the company which is reeling under a debt burden of about Rs 1.95 lakh crore. "...the board of directors, at its meeting held on 10th January 2022, has approved the conversion of the full amount of such interest related to spectrum auction instalments and AGR dues into equity.
Representatives of the British telecom company on Friday met senior finance ministry officials, in search of an amicable solution.
Vittorio Colao, who is currently on an India visit, said he would be open to listing his company in the country
Cut-throat competition, high spectrum costs, and frequent flip-flops in government policies have made it difficult for Vodafone to make money in the country.
Tata Sons Ltd, the holding company of the $150 billion Tata group, may be forced to infuse fresh capital into its loss-making telecom arm, Tata Teleservices Ltd (TTSL). This is because TTSL has to pay Rs 19,256 crore adjusted gross revenue (AGR) along with other dues to the central government by March 2026.
There is considerable speculation as to whether this award would have any bearing on another Vodafone-type case, namely, the ongoing tax-related arbitration proceedings with Cairn Energy.
IBM, Nokia Oyj, Microsoft cases could now be resolved
Bharti Airtel vice-chairman & managing director Gopal Vittal on Wednesday said while a call on exercising the option of converting pending spectrum dues into government equity would be taken by its board, the company had reached out to the Department of Telecommunications (DoT) to confirm whether it could do so. "On the adjusted gross revenue (AGR) conversion, it was simple.
The IPO is expected to bring handsome fees for the selected banks at a time when billion-dollar listings have become scarce
Though Google's investment is minuscule and will not move the needle, it will attract other investors to the company and be a morale booster. Pursuing Vodafone Idea would potentially pit Google against Facebook and an increasingly dominant Jio.
Vodafone Idea (Vi) is in continuous talks with network vendors to finalise its 5G rollout plans, Vodafone Idea CEO Akshaya Moondra said. "We are in early stages of 5G deployment. "5G is an important development and we are keeping our eyes on it," Moondra said on Wednesday in a post-result analyst call. Already five months behind rivals Jio and Airtel in the 5G race, Vi's efforts will be on the deployment of 5G in target geographies.
Conversion of debt of the stressed telecom player Vodafone Idea Ltd (VIL) into equity could be an option to emerge out of the crisis, lenders led by State Bank of India (SBI) have suggested to Department of Telecommunications (DoT). DoT had called senior bank officials on Friday to discuss the stress in the telecom sector arising out of the Supreme Court order last month on the adjusted gross revenue (AGR)-related dues payable by telecom majors, including Vodafone Idea and Bharti Airtel, sources said. The top court has given a time period of 10 years to telecom service providers struggling to pay Rs 93,520 crore of AGR-related dues to clear their outstanding amount to the government.
The two independent brands Vodafone and Idea will be phased out, and the legacy of the two companies will reflect in the common brand -- Vi.
The government should convert Vodafone Idea's (Vi) debt into equity to avoid a duopoly in the telecom sector, Deutsche Bank Research said in its report on Monday. This, the bank suggested, would be the only viable solution in the backdrop of the Supreme Court dismissing the telecom company's application for recomputation of adjusted gross revenue (AGR) dues.
The government will have to make substantial payments, as well as forego revenues in FY'23, if it wants to work on the survival of Vodafone Idea because it will have to extend the same incentives to the entire telecom sector. According to estimates, the industry has to spend around Rs 21,000-Rs 25,000 crore for spectrum which it bought on a deferred payment basis. Vodafone Idea has asked for a moratorium for another year (FY23). If granted, the government will have foregone the instalment payout for a third year in a row as it has already provided a moratorium for two years, giving telcos Rs 42,000 crore worth of relief.
Telecom operator Bharti Airtel on Friday said it has signed an agreement to buy Vodafone's 4.7 per cent stake in Indus Towers on the condition that the proceeds will be used for investment in Vodafone Idea and clearing its dues towards the mobile tower company. Debt-ridden Vodafone Idea (VIL) has been unable to pay dues to Indus Towers and both VIL and promoter Vodafone have proposed a payment plan to clear the outstanding amount by July 15. In the meantime, VIL has committed to pay certain minimum amount each month to Indus Towers.
Investors would track a host of macroeconomic data announcements scheduled this week, including inflation numbers, and also monitor global market trends, and trading activity of foreign institutional investors, analysts said. The ongoing quarterly earnings announcements and the rupee-dollar trend would also influence the markets.
Globally, the focus has moved back to India, especially in terms of telecom assets. Vodafone Idea, with some 300 million customers, continues to be attractive with shares available at a low price.
Cabinet will take a decision on a conciliation offer from Vodafone.
Vodafone Idea's cash flow analysis indicates that its situation may remain challenging even after any relief measures, and the telco needs "meaningful capital infusion" with a long gestation period to become competitive, a report by Credit Suisse said on Wednesday. The report expects Airtel to be "well placed" in either of the scenarios, of two-private-operator sector, or three private operators post an industry repair. The note by Credit Suisse on the Indian telecom sector said there has been increasing interest among investors to evaluate valuations of Bharti Airtel and Indus Towers under two situations, in the wake of recent developments.
The chief of the British telco's Indian subsidiary, which is the second largest cellular operator in India, also said the recent decisions by telecom authorities have disappointed the sector.
Cash-strapped telco Vodafone Idea's proposal for investment of up to Rs 15,000 crore through foreign direct investment (FDI) has been approved by the Union government, according to officials. A top-level group, comprising representatives from the ministries of home affairs, external affairs, finance and commerce and industry, took the decision. The nod, which is an enabling provision, would help the financially-stressed company raise funds to pay up some of its dues linked to adjusted gross revenue (AGR), reduce debts and use the money for operational expenses.
Vodafone India, the nation's second-biggest telecom firm, is planning to invest Rs 7,100 crore in the next 2-3 years, mainly on rolling out 3G networks.
Amid an existential crisis facing the firm over Rs 50,000 crore unpaid dues towards the government, billionaire Kumar Mangalam Birla on Wednesday stepped down as the chairman of Vodafone Idea Ltd. Birla -- who had in June offered to give away his holding in the joint venture with Britain's Vodafone to the government -- will cease to be a director and non-executive chairman of the company at the end of business hours on Wednesday, VIL said in a filing to the stock exchanges. It did not give any reason for Birla's decision. He will be replaced by Himanshu Kapania (who was earlier managing director and CEO of Birla's Idea Cellular) as the new chairman of Vodafone Idea Ltd.
Finance Minister Arun Jaitley, in his Budget speech on Monday, announced a new dispute resolution mechanism for such companies who are in confrontation with the taxman's action.
The company at present provides monthly mobile services at starting price of Rs 24 without data, and plans with data service starts from Rs 33 onward. It did not disclose the quantum of hike.
If Modi's truly a reformer and a believer in minimum government, he would bury the Vodafone ghosts now. He would also then go to Bihar, campaigning on his politically controversial reforms. Both will need him to dip deep into his accumulated political capital and risk it, suggests Shekhar Gupta.
Spectrum auction on Thursday entered the 10th day of bidding and started off from Rs 61,091.83 crore (Rs 610.91 billion) in terms of value.
While Airtel may be pushed to to No 3, Jio will find it mighty difficult to beat the new entity.
A landmark tax case between Vodafone of the UK and the Indian government that is set to determine the future climate for mergers and acquisitions in the country began on Monday.
Under the 2007 agreement between Vodafone and Essar, the latter has a put option of divesting its stake in the telecom venture.
