Vodafone India’s proposed acquisition of Mumbai-based internet service provider You Broadband is awaiting approval of the Foreign Investment Promotion Board (FIPB).
The telecom company, a subsidiary of UK-based Vodafone Plc, is also preparing for an Initial Public Offering (IPO), even though there is no timeline in sight.
“It’s in the process of an FIPB approval,” Sunil Sood, Managing Director and Chief Executive Officer at Vodafone India, told
In April, Vodafone India had acquired You Broadband for ₹350-400 crore, a move that will strengthen presence in the home broadband segment. Rothschild India and ICICI Securities were the advisors for the deal.
You Broadband has more than 3,000 km of optical fibre cable and 6,000 km of last-mile co-axial cable network and employs 1,400 people.
You Broadband, an internet service provider with presence across 12 cities — including Hyderabad, Bengaluru, Chennai, Pune and Surat – had 5 lakh subscribers as on January 2016.
IPO planThe Indian arm of the British telecom major is also readying for an IPO.
“We are positively inclined to do an IPO. In the context of readying ourselves, there were a lot of private conversations with investment and private bankers,” Sood said, but did not provide further details.
The company, which had received payment bank licence in August last year, intends to roll out the services within 18 months of the in-principle licence.
“Our plan is also to be within that timing,” Sood said, adding that the company would look at services such as representing insurance companies, providing micro finance, micro housing and international remittances.
On the issue of future proofing the business in terms of 4G spectrum, he said that as a company Vodafone India needs spectrum and is keen in looking at all options including sharing and trading. The company as of now has less 4G spectrum compared to its rivals. Yet it has launched services in metro cities.
India revenue up 5%Vodafone India posted a meagre 5 per cent rise in service revenue at ₹44,303 crore for the financial year ended March 31, blunted by fall in mobile termination rates and roaming charges. Further, it was also impacted by a rise in service taxes and Swachh Bharat taxes. It had recorded ₹42,204 crore as service revenue for the previous financial year.
“There has been a lot of regulatory impact,” Sood said, adding that the service revenues, excluding regulatory impact, rose 10 per cent to ₹46,435 crore. The company’s EBITDA margins were at 29.5 per cent (29.7 per cent).
“Our debt is not an issue, we have a very healthy parent company who has invested into India,” said Thomas Reisten, Chief Financial Officer, Vodafone India.
Vodafone India has a net debt of ₹81,500 crore as of March 31.