The 4G tariff war is bound to escalate in coming days. Vodafone India was planning to file for an IPO but Reliance Jio 4G launch disrupted Indian Telecom sector. As I predicted that vodafone will not go for an IPO as it will be difficult for them to get the right price for offered equity.
Given the circumstances,Vodafone plc showed its trust on Indian arm and infused 47700 Cr in the former of equity. It will also help Vodafone India to raise debt from Indian bank . At the same time, will give Vodafone India the financial power to go all out during spectrum auction and acquire spectrum to be competitive in the segment. At the same time, it will help them to match Reliance jio pricing in the market. It's well known that all the party will bleed but Vodafone India will be less impacted given the fact that more than 60% of their user will be intact.
Reliance jio will suffer more as they rely only on Smartphone users whereas that is not the case with Vodafone India. We already know that Airtel already embarked around $9 bn for network expansion which they will spend in next three years. Vodafone plc made their intention clear to competitors that they are serious about their Indian market and in no mood to lose market share
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