Shares fluctuate on speculations: Vodafone Idea, the third-largest telco in India by consumer volume, saw shares tumble after the company discredited reports of tying up with billionaire Elon Musk's satellite internet company Starlink.

A business magazine said markets were betting on Musk looking to buy a stake in the company to help Starlink enter India, which also had a positive impact on stocks.

After the Tuesday dismissal and resignation of P Balaji, the company’s stocks closed 0.87 per cent lower at Rs 15.89 on the Bombay Stock Exchange.

Government Brush-Off

Source: ANI

The government holds a 33.1 per cent stake in the entity after it converted the telco's accrued interest towards adjusted gross revenue (AGR) arrears into equity in early 2023.

The government is not considering any proposal to take over Vodafone Idea (VIL), Minister of State for Communications Devusinh Chauhan said in a written reply in Lok Sabha during the Winter Session.

Not the first prediction

Source: Reuters

On September 17 last year, there was another report of US telco Verizon and Amazon being potential investors in VI, which was formed after the merger between British telco Vodafone and Aditya Birla Group’s telco entity Idea.

As per reports, Verizon, Amazon, and Starlink were in the race to acquire the telco.

Vodafone quickly discredited the reports on exchanges, saying “This is about a news item titled ”Vodafone Idea to be acquired by a US telecom giant Soon? Verizon, Amazon, or Starlink, in the race”, which is doing rounds in electronic and social media. We wish to submit that the said News Item is incorrect. The Company is not in any such discussion with any of the named parties.”

Musk vs Bezos Again?

Market analysts cited conversations between India and US leadership during the G20 summit as grounds for the development. Notably, Amazon’s former CEO and founder Jeff Bezos is an arch-rival of Elon Musk, who owns Starlink. The two billionaires have often exchanged places as the world’s richest. Their ambitions have often aligned, from space expeditions to now entering the Indian telco scenario.

Troubles for VI
 

The entry of Reliance Jio in the telecom spectrum caused VI to fast lose subscribers, and enter losses in a bid to announce competitive prices. Aditya Birla had also left the top chair for the merged telco but returned later.

The AGR dues of mobile phone companies, as per Supreme Court judgments, are around Rs 1.43 lakh crores ($20 billion), which is about half of what Elon Musk paid to acquire X. After a 10-year deadline given in 2019, the government came up with the bailout package, but as per reports was seeking a US entity over a middle-east one for the recovery of dues after selling off shares