Vodafone ready to pump $3bn into India before spectrum auction

Vodafone: Faced with increasing competition from Mumbai’s Reliance Jio Infocomm and with a national  spectrum auction due to take place at the beginning of October, Europe’s largest mobile phone operator is said to be  planning to invest $3bn in its Indian operation in a debt/equity swap. The move is the latest development in an increasingly intense battle for market share in one of the world’s fastest growing telecommunications market; according to Morgan Stanley, India is expected to overtake the US as the second-largest smartphone market next year with a growth rate nearly five times that of China. It estimates that by 2018 11% of all new smartphones – around 192 million – will be destined for the sub-continent. 
The immediate motivation for Vodafone’s decision is likely to have been the launch of Jio’s 4G service earlier this month and the price war it has triggered by its decision to offer free voice for life and data at about fifth of the going market rate. In terms of geographical coverage, Vodafone is now trailing both Jio and Bharti Airtel.
Analysts expect the UK-based company to be the most aggressive bidder in the forthcoming auction and are predicting that it could be about to spend as much as $2bn on the acquisition of more spectrum. Although they are also suggesting that Jio’s launch could disrupt its plans for the IPO of its Indian operations, the company insists that the flotation remains on track, but would not specify a date. 
“We continue to prepare for a potential IPO and there has been no change in our timetable,” it told the Economic Times.
If or when it goes ahead, the IPO is expected to raise as much as $3bn, which would make it India’s largest IPO to date. 

Source: indiatimes