Due to new rules established by India's government, Vodafone could be forced to sell its 4.4 per cent stake the country's largest mobile operator, Bharti Airtel, which is worth around $1 billion (€753 million).
As Reuters reports, the new rules forbid an operator to own directly or indirectly an equity stake in another operator that is offering service in any of India's 22 telecom service areas. Vodafone and Bharti Airtel offer wireless service across India.
It's unclear exactly how Vodafone and Bharti Airtel will react to the new rules. Bharti Airtel declined to comment, according to Reuters, and Vodafone did not immediately respond to a request for comment.
(Vodafone isn't the only operator to face difficulties with Indian officials: India's Supreme Court earlier this year revoked the mobile licence jointly held by Telenor and Unitech.
Vodafone's Indian stake isn't the only part of the business in play: Vodafone Chairman Gerard Kleisterlee said his company's board would seriously consider a proposal from Verizon Communications in the United States to buy Vodafone's 45 per cent stake in Verizon Wireless--but only if the deal gave Vodafone shareholders more value than they derive now from the partnership. Vodafone's stake in Verizon Wireless could be worth up to $100 billion.
Finally, Vodafone could seek to recoup a loss in India through any number of international mechanisms. For example, the operator recently announced it is establishing two new regional hubs in Africa to improve customer support to multinational clients, as revenue from its enterprise customers on the continent exceeded €1 billion in the financial year to March 2013.
For more:
- see this Reuters article
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