At a time when investment by tech companies and tech-focused investment funds in telecom companies seems to be in vogue, it is believed that Google may be considering investing in Vodafone Idea. If this investment was to go through, it would suit both parties quite well. Google will be able to battle rival Facebook on an equal platform, and it would give Vodafone’s struggling India arm a much needed boost.
Google is considering buying stake of about 5 per cent in Vodafone Idea, a partnership between the UK telecoms company and India's Aditya Birla Group that has been under severe financial strain, reports the Financial Times. It is being reported that the process is at a very early stage. This comes at a time when Reliance Jio has secured more than $10 billion in investment from Facebook as well as private equity groups KKR, General Atlantic, Vista Equity Partners and Silver Lake.
There is an even greater emphasis on mobile services in India over the past few months as the country has been under multiple phases of lockdown due to the Coronavirus Pandemic. Users are paying more than ever before for mobile data, and the situation has also given another push to digital transactions such as online shopping and digital payments. Important to note that Google also has the Google Pay digital payments app in India, competing with the likes of Paytm and PhonePe.
Vodafone Idea has not had the best of times recently, and is under serious financial strain in the uber-competitive Indian telecom space which has the world’s lowest tariffs. Vodafone Idea also has to pay the retrospective fees, as mandated by the Supreme Court.
In India, Vodafone Idea is competing with Reliance Jio and Airtel in the telecom space.
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