Market excitement about Elon's Starlink partnership sends Vodafone Idea rising in India

 Market excitement about Elon's Starlink partnership sends Vodafone Idea rising in India

Market excitement about Elon's Starlink partnership sends Vodafone Idea rising in India

Vi increased by 21% as a result of Elon Musk's January 10 visit to Gujarat, which created a stir in the market on the tech billionaire's potential partnership with an Indian telecom company. Vi is thought to be a possible partner for any of the two as Amazon's space-connected broadband business would also need a spectrum partner. Vi recently paid the government Rs 1701 crore in exchange for the 5G spectrum it won in the 2022 auction.

Elon Musk, the most successful tech billionaire in the world and a trailblazing entrepreneur, is set to collaborate with Vodafone Idea (Vi) to make his first foray into the Indian telecom market, according to a Friday rumor from the grapevine. Additionally, the markets were wagering that in order for Starlink to join the Indian market, the government would sell Musk its 33.1% share in Vi. Between January 10 and 12, Musk will be in India for the Vibrant Gujarat Business Summit. During his tour, he has been linked to a significant land purchase in the state that may result in a massive plant for his vehicle firm, Tesla. The markets now anticipate that during Musk's visit to Gujarat, significant telecom-related announcements from Starlink and the government would be made.

The market was also placing bets that Amazon's Project Kuiper would need a spectrum partner in order to successfully enter India for broadband services, which may make investing in the stocks of Indian telecom companies appealing. As. Amazon will face competition in India from Bharti-backed OneWeb, Elon Musk's Starlink, and Reliance Industries' Jio Satellite. Although Bharti and Jio own their own satellite systems, Vi is open to a partnership with either Amazon or Musk.

The National Stock Exchange (NSE) and BSE jointly exchanged around 200 crore Vodafone Idea (Vi) shares, of which approximately 54 crore were marked for delivery. In the last several years, this is the largest amount that has been on the counter. As a result, Vi's share price increased by 21%, marking the largest one-day gain for both Vi and any Indian telecom business in 2023. Vi ended at a premium of Rs 16 over its previous closing and reached a 52-week high of Rs 16.25 on the NSE. Cost: Rs. 13.25. Vi is among the top 10 firms in the world in terms of subscriber base, with over 22 crore (220 million) active users. Vi became a possible player in the new game when it paid the government Rs 1,701 crore in September for 5G spectrum that it had purchased in the 2022 auction.

SpaceX is the operator of Starlink, a constellation of over 4,000 low-Earth orbiting satellites that may provide internet and mobile service to underserved rural regions. In addition to approving Starlink's application to become an Internet service provider, the Indian government is about to award the business a license for Global Mobile Personal Communications via Satellite Services (GMPCS). For this GMPCS business, Starlink has agreements with Vodafone in various nations. Musk's SpaceX has reached an agreement with Vodafone's recently renamed One NZ division to offer complete mobile service in the nation by 2024. Vodafone has also entered into an agreement with Amazon's Project Kuiper in Europe.

According to reports, Starlink's license was approved after the conclusion of security inspections and the government's approval of the answers provided. The corporation was requested to provide details about its data storage intentions inside the nation in accordance with the current regulations.

Vi is desperate for funding since it has been in a precarious position in India's telecom industry for over ten years and is looking for a savior. However, the business has always been able to pay its debts in full and has never failed even in the most difficult of circumstances. For the last five years, Vi's revenue base has been consistent at roughly Rs 41,000 crore, or $8 billion. However, all of this money is used for interest payments and bank operations.

The Indian Parliament enacted a telecom law in December that modifies the country's antiquated regulations and opens the door for satellite broadband and other forms of contemporary connection. India has 881 million Internet users and 1.17 billion phone connections. OneWeb, Starlink, and Amazon's Kuiper might gain from the recently enacted Telecom Bill as it permits spectrum distribution for satellite-based services without the need for auctions. These companies are eager to introduce their satellite broadband services in India.