Google eyes stake in Vodafone Idea
30 May, 2020
Tech titan Google is said to be exploring taking a minority stake in British telecom group Vodafone's struggling India business. The investment in Vodafone Idea will pit the search giant against Facebook which includes found a stake in Jio Platforms, the firm that houses India's youngest but biggest telecom company, Reliance Jio.
Alphabet Inc's Google is thinking of buying about 5 per cent stake in Vodafone Idea Ltd, the Financial Times reported on Thursday.
Both companies refused to comment.
The move by Google follows Facebook and other private equity investors pouring in USD 10 billion in Jio Platforms, which holds billionaire Mukesh Ambani's telecom firm, Jio.
The move assumes significance as Vodafone Idea Ltd (VIL) - where Vodafone holds just over 45 % stake - is looking at practically Rs 58,000 crore in unpaid statutory dues.
These dues arose after the Supreme Court, in October this past year, upheld the government's position on including earnings from non-core businesses in calculating the gross annual AGR (Adjusted Gross Revenue) of telecom companies, a share which is paid as licence and spectrum fee to the exchequer.
The Department of Telecom (DoT's) according to its own submission to the apex court earlier this season seeking relief in payment tenures, had put dues of three telecom companies -- Bharti Airtel, Vodafone Idea and Tata Group at Rs 1.19 lakh crore.
From this, Bharti Group had calculated its dues at Rs 13,004 crore, Vodafone Idea at Rs 21,533 crore and Tata Band of companies at Rs 2,197 crore.
In March, following an approval by the Cabinet, a credit card applicatoin was moved prior to the Supreme Court (on March 16, 2020) seeking its permission for the licensees influenced by the AGR judgement to pay the unpaid amount of the DoT-calculated dues in gross annual instalments over 20 years.
Vodafone Idea has been under extreme financial pressure, and analysts over and over have cautioned that company's longer-term viability remains under cloud.
In December, Vodafone Idea Chairman Kumar Mangalam Birla had said VIL may need to shut when there is no relief on the statutory dues.
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