UK-headquartered mobile operator Vodafone is reported to be seeking approval from authorities to take full control of its India business, in which it currently holds a stake of 64.4%.
According to a report from Dow Jones, the operator has sought permission from India’s Foreign Investment Protection Board to buy remaining shares in the company in a deal likely to cost around $1.65 billion.
Vodafone (Newbury, UK) is looking to take advantage of a recent change in Indian legislation allowing foreign investors to own 100% of telecoms companies in the country.
Before that change came into effect in July, foreigners were prevented from holding a stake of more than 74% in telecoms companies.
Vodafone seems likely to fund any acquisition of outstanding shares using proceeds from its $130 billion sale of shares in US operator Verizon Wireless to former partner Verizon Communications (New York City, NY, USA).
Following the conclusion of that deal, the company announced plans to invest an additional £6 billion ($9.66 billion) in its various international businesses over the next three years.
The funds should help the operator to improve its position against rivals, particularly in Europe, where it has recently lost ground to some of its biggest rivals.
Serving about 155 million customers, Vodafone India is the country’s second-biggest operator and has continued to grow while other Vodafone units report declining revenues.
For the three months ending June, Vodafone India flagged a nearly 14% increase in revenues, compared with the same period the year before.
Having spent significant sums on licenses needed to provide 3G services, the operator is now hoping to capitalize on the opportunity to sell smartphones and mobile data services to more affluent consumers.
Although Vodafone’s direct stake in Vodafone India is just 64.4%, the operator actually holds as much as 84.5% of the operator through investments in companies in which it does not have a majority stake, reports Dow Jones.