Voda gets ready to fight Jio

In the largest foreign direct investment in India since the Narendra Modi-led BJP government was voted in in 2014, Vodafone Plc, Europe's biggest mobile service provider, has infused $7.5 billion (Rs.47,700 crore) in its Indian arm, empowering the company with more ammunition to defend its turf in the world's second largest telecommunications market where competition has intensified with the entry of Reliance Jio.
Vodafone India, the No. 2 player with 200 million subscribers behind Bharti Airtel, will be using the funds to ramp up its network and participate in the upcoming radio airwaves auction. The announcement came eight days ahead of the launch of the biggest-ever spectrum auction and 17 days after the launch of Reliance Jio, which is emerging as the biggest rival for incumbent mobile service providers.
Reliance Jio, controlled by billionaire Mukesh Ambani, has stormed the market with free calls and rock-bottom data tariffs, pressuring existing telecom operators to rethink their strategies to protect their market share. Vodafone India is expected to be the most aggressive bidder at the ensuing spectrum auction with analysts predicting that it could spend as much as Rs.16,300 crore on buying airwaves.
The new telecom war and the fresh equity injection in Vodafone India, the second largest investment in the country after British Petroleum's acquisition of 30% stake in Reliance Industries' 21 oil blocks on the Krishna Godavari basin off the Andhra coast for $7.2 billion in 2011, has raised speculation that the Newbury , England-based parent may delay taking its local arm public.
Vodafone Plc entered the country in 2007 by acquiring a 67% stake in Hutchison Essar for $10.9 billion and the latest fund infusion is its second biggest investment in India, which today is its third largest revenue generating market globally . So far, it has invested about Rs.1.15 lakh crore in India. Vodafone India also plans to use the money it recently received from its parent to retire high-cost debt, which currently stands at Rs.34,500 crore and improve its quality of service.

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