Technology giant Google is exploring to acquire 5 per cent stake in debt-laden Vodafone Idea, a telecom joint venture between Vodafone PLC of UK and Aditya Birla group, as per media report. The move is being seen as part of Google's strategy to foray into India's booming mobile sector, in a similar line with Facebook which recently acquired 10 per cent stake in Mukesh Ambani's Jio Platform.
Initially, Google parent firm, Alphabet was planning to acquire stake in Reliance Industries' telecom arm Jio, but it lagged behind social media giant Facebook in securing a deal, The Financial Times reported on Thursday. By securing stake in Vodafone Idea, Google would potentially pit against Facebook and an increasingly dominant Jio, but the company could also make multiple investments in India.
As per the report, Google was considering buying stake in Vodafone's struggling India business and the talk was at a very early stage.
The investment by Google will provide much needed respite to cash-strapped Vodafone Idea which faces an existential threat amid adjusted gross revenues (AGR) dues of Rs 53,038 crore.
Earlier this month, UK-based Vodafone plc, which owns about 45 per cent in Vodafone Idea, had infused Rs 1,530 crore (or $200 million) into the Indian joint venture to support managing operations amid the coronavirus crisis. The payment will also help Vodafone Idea pay statutory dues to the government.
As per the Department of Telecom's (DoT) estimate, the total AGR dues of Vodafone Idea is Rs 53,000 crore, while as per the company's self-assessment the outstanding dues is estimated to be around Rs 23,000 crore. Out of the Rs 23,000 crore, the telecom operator estimated its principal amount to be Rs 6,854 crore.
In May, Vodafone Idea had paid about Rs 1,367 crore to the government towards licence fee and spectrum usage charges (SUC) payment for the March quarter this year. Last month, the telco had paid Rs 6,854 crore to DoT towards the AGR payments, or its full principal dues, as per its self-assessment.
In last one month, RIL's Jio Platforms has bagged investment worth over $10 billion (Rs 78,562 crore) from the likes of Facebook, KKR & Co, Silver Lake, Vista Equity Partners and General Atlantic. As per latest report, global tech giant Microsoft Corp is in talks to buy stake in Jio Platforms.
By Chitranjan Kumar