Vodafone to invest $3bn in India to take on Reliance Jio

It’s no exaggeration if we say that Reliance Jio has changed the face of Indian telecom sector forever. Though the brand is reeling under some after-launch glitches, the Jio effect doesn’t seem to be stopping. Other telecos are leaving no stones unturned to retain their customer base who are feeling increasingly tempted to try out Jio’s faster network and free calling.

Vodafone’s UK parent is looking at investing as much as $3Bn into its Indian counterpart and is again pondering over the IPO thing, according to a report published in The Economic Times. The move is being considered for two basic reasons: firstly to reduce Vodafone India’s rising debt (which stood at about ₹81,500 crore in 2015-16), and secondly to prepare for the upcoming spectrum auctions.

A person familiar with the current developments told ET, “Overseas market conditions make it favorable to replace the debt here with equity as the return on equity is higher here and it will cut the debt servicing costs.”

Vodafone hasn’t commented on the report as yet but did mention that it plans to invest more in India and that there’s no change in the IPO timetable.

According to ET, “Europe's largest mobile phone operator is also believed to be reviewing the timelines for Vodafone India's initial public offering, wary of value erosion due to a tariff war unleashed by Jio, people familiar with the matter said.”

However, Vodafone gave the following statement to an email queried by the newspaper, “We continue to prepare for a potential IPO and there has been no change in our timetable.”

Also, read Register online to get Jio SIM card delivered at your doorstep.