Decoding VI’s money rush: From government to Starlink and Verizon?

Shares fluctuate on speculations: Vodafone Idea, third-largest telco in India by consumer volume, saw shares tumble after company discredited reports of tying up with billionaire Elon Musk's satellite internet company Starlink.

A business magazine said markets were betting on Musk looking to buy a stake in company to help Starlink enter India, which also h a positive impact on stocks.

After Tuesday dismissal and resignation of P Balaji, company’s stocks closed 0.87 per cent lower at Rs 15.89 on Bombay Stock Exchange.

Government Brush-Off

Source: ANI

government holds a 33.1 per cent stake in entity after it converted telco's accrued interest towards justed gross revenue (AGR) arrears into equity in early 2023.

government is not considering any proposal to take over Vodafone Idea (VIL), Minister of State for Communications Devusinh Chauhan said in a written reply in Lok Sabha during Winter Session.

Not first prediction

Source: Reuters

On September 17 last year, re was anor report of US telco Verizon and Amazon being potential investors in VI, which was formed after merger between British telco Vodafone and itya Birla Group’s telco entity Idea.

As per reports, Verizon, Amazon, and Starlink were in race to acquire telco.

Vodafone quickly discredited reports on exchanges, saying “This is about a news item titled ”Vodafone Idea to be acquired by a US telecom giant Soon? Verizon, Amazon, or Starlink, in race”, which is doing rounds in electronic and social media. We wish to submit that said News Item is incorrect. Company is not in any such discussion with any of named parties.”

Musk vs Bezos Again?

Market analysts cited conversations between India and US leership during G20 summit as grounds for development. Notably, Amazon’s former CEO and founder Jeff Bezos is an arch-rival of Elon Musk, who owns Starlink. two billionaires have often exchanged places as world’s richest. ir ambitions have often aligned, from space expeditions to now entering Indian telco scenario.

Troubles for VI
 

entry of Reliance Jio in telecom spectrum caused VI to fast lose subscribers, and enter losses in a bid to announce competitive prices. itya Birla h also left top chair for merged telco but returned later.

AGR dues of mobile phone companies, as per Supreme Court judgments, are around Rs 1.43 lakh crores ($20 billion), which is about half of what Elon Musk paid to acquire X. After a 10-year deline given in 2019, government came up with bailout package, but as per reports was seeking a US entity over a middle-east one for recovery of dues after selling off shares