Online retail giant Amazon and the largest wireless carrier in the US, Verizon Communications, are reportedly in talks with Vodafone Idea to invest in the cash-strapped telecom player. According to Mint, the companies are in talks to buy a significant stake in struggling Vodafone Idea Ltd for more than $4 billion.
The stake-sale talks were paused because the outcome of a Supreme Court case on staggered payments of government dues was uncertain and could have threatened the survival of Vodafone Idea, Mint said citing sources. The talks have resumed after the Supreme Court allowed operators to pay up their aggregated gross revenue (AGR) dues in a staggered manner over a period of 10 years.
The judgment was keenly awaited as the fate of Vodafone-Idea hinged on it. There were worries that a stringent judgment from the court might force Vodafone-Idea to shut down its service. Vodafone Idea alone has a staggering balance of Rs 50,399 crore in AGR dues, according to solicitor general Tushar Mehta.
The company reported a staggering loss of Rs 25,460 crore in the June quarter due to one-time charges, including provisions to cover payments due to the government. With the Supreme Court judgment, analysts had observed that either the promoters of Vodafone Idea must invest more funds in the company or there has to be another round of tariff hikes to ease out their liquidity position as they still owe a substantial part of their AGR dues
While Amazon has a major presence in India, Verizon is present in India through its media and online unit Oath Inc. Verizon has also partnered with Bharti Airtel in the past.
Earlier this year, Financial Times reported that Google was in talks to acquire a 5 per cent stake in Vodafone Idea. Google, however, decided to invest $4.5 billion in its rival, Jio Platforms, the digital arm of Reliance Industries Ltd.
