Vodafone Group has injected more than $7 billion into its India subsidiary, reducing its debt by half and preparing it for next month’s spectrum auction and intensifying competition following Reliance Jio’s nationwide 4G launch.
The UK-based mobile operator said it has added INR477 billion ($7.11 billion) in equity to Vodafone India since April. The capital injection, which converts loans into shares, is the largest foreign direct investment in rupee terms, Economic Times said. It reduces its debt by more than 50 per cent to INR343 billion.
Vodafone India said in a statement the capital would be used to acquire spectrum and upgrade its network.
The Times reported last week that Vodafone planned a capital injection, but the stated amount was just $3 billion.
The infusion comes as Vodafone India faces an increased threat from 4G upstart Jio, which is offering free voice, SMS and data until the end of the year, and reportedly already has 10 million subscribers. The newcomer said its LTE network will cover 90 per cent of the population by early 2017, which is forcing rivals to significantly boost their network investments.
Vodafone India, the country’s second largest operator with a 19 per cent market share, only has 4G spectrum in nine of the country’s 22 service regions, so is expected to bid aggressively for 3G and 4G airwaves in the auction, with its spending forecast to go as high as $2.6 billion.
India’s largest ever spectrum auction starts on 1 October, with more than 2,350MHz of spectrum in seven 3G and 4G bands going on sale.
Vodafone has put down a INR27 billion deposit for the auction, while Jio deposited INR65 billion, the Financial Times reported.