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Google looking at Vodafone Idea investment – report

Google is rumoured to be considering an investment in struggling Indian telco Vodafone Idea as Facebook positions itself for an assault on the market.

India has long been held in high regard for the potential of its economy, but this promise has often failed to translate into profits. Hope has been renewed with Reliance Jio democratising connectivity across the country, and it seems to be getting US investors excited.

According to reports in the Financial Times, Google is looking at an investment in the struggling Vodafone Idea, as much as 5%, as a pathway to Indian riches.

Some have suggested Google’s parent company was considering an investment in Reliance Jio, though these rumours are highly unlikely to progress any further with Facebook’s investment in the disruptive telco. That said, an investment in Vodafone Idea would be a very interesting transaction.

Firstly, Google would like to enter the Indian market. Reliance Jio has forced rivals to re-evaluate tariffs, opening-up connectivity to the masses. Democratised connectivity is a remarkable opportunity for Silicon Valley, one which is not being ignored by anyone else. Google has numerous business units which would benefit; balloons to offer connectivity in rural environments, a cloud computing unit and mobile-native applications from search to video and payments.

Secondly, Vodafone Idea needs input, both financially and operationally. It is facing a considerable spectrum bill from the Government and parent company Vodafone has said it would not be contributing anymore funds. Operationally, something has to change if it is to compete with Reliance Jio and bringing in one of the worlds’ most innovative companies would certainly be a step forward.

This could be a cut-price opportunity for Google to get a solid foot through India’s front door at a time where the market potential is looking very attractive.


Telecoms.com Daily Poll:

How do you feel about market consolidation in Europe?

  • Consolidation is fine if new players are created; greenfield telcos could be encouraged to emerge, like Dish and Rakuten (47%, 28 Votes)
  • All for it – scaled telcos are much more beneficial (34%, 20 Votes)
  • Against it – four should still be the minimum number of telcos to preserve competition (19%, 11 Votes)

Total Voters: 59

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