Google eyes stake in Vodafone Idea

MUMBAI: Google Inc is considering picking a stake of about 5% in Vodafone Idea Ltd, said a person aware of the development.

The telecom joint venture of Vodafone Group Plc and the Aditya Birla Group is also in talks with private equity firms for potential investments, the person said on condition of anonymity.

According to the average price of the Vodafone Idea stock in the last two weeks, a 5% stake sale could fetch the company around $101.5 million. The stock has lost more than 57% in the last 12 months. To be sure, an eventual deal could happen at a significant premium to the recent stock price.

Google’s interest in Vodafone Idea comes at a time of financial stress on the Mumbai-based company amid cheap mobile tariffs and strong competition that intensified with the entry of Reliance Jio Infocomm Ltd in September 2016. Facebook last month announced a $5.7 billion investment in Vodafone Idea’s rival Jio Platforms.

An investment in Vodafone Idea will pit the US internet giant against the Facebook-jio combine for the world’s fastest-growing mobile market, according to the Financial Times which first reported the news.

In October last year, the Supreme Court upheld the government’s broader definition of adjusted gross revenue (AGR), on which it calculates levies on telecom operators. The order dealt a blow to the telecom industry, with Vodafone Idea owing the government ~53,000 crore in AGR dues.