TPG Global, Apollo Global, and Carlyle Group, among others, are in early talks with debt-ridden Vodafone Idea (Vi) to invest in the telco's optic fibre and data centre assets valued over rs $1 billion, according to Hindustan Times, citing two persons familiar with the subject.

The deals will, however, be on a sale-and-leaseback basis because Vodafone Idea would continue to utilise the optic fibre infrastructure.

“Because telecom and internet penetration is continuously rising, the fibre assets, fixed broadband, and data centre companies have enormous growth potential. For PE deals, pricing will be crucial. “The agreements should be concluded in 2-3 months,” one of the two persons says in a statement.

To satisfy regular, adjusted gross revenue (AGR) and spectrum dues, the loss-making telco must pay Rs 22,500 crore between December 2021 and April 2022.

On March 31, it had a cash balance of Rs 350 crore and reported a loss of Rs 6,985.1 crore for the quarter ended March.

Though Vodafone Idea has been attempting to finance Rs 25,000 crore through a mix of loan and equity for the past nine months, it has been unsuccessful despite many rounds of conversations with investors.

“There are also signs that the government may take efforts to put an end to the age of predatory pricing by telecom service providers. Tariffs will be raised to levels that are reasonable. The situation will improve as a result of this,” the second insider told the publication.

The third-largest Indian telco is expected to monetize its assets, including fixed-line broadband subsidiary You Broadband, optic fibre unit, and data centres company, to raise $1 billion (about Rs 7,400 crore) in cash flow to pay looming liabilities, according to Economic Times.

During an analyst call last week, Vodafone Idea's chief financial officer Akshaya Moondra said the telecom expects to generate an additional Rs 3,000 crore in cash this fiscal year through tax refunds and the sale of land parcels purchased for data centres.

Vi, which has a subscriber base of roughly 267.8 million, has one data centre in Navi Mumbai and around 160,000 kilometres of fibre optic cable. In 2017, it paid Rs 400 crore to TRG Capital for You Broadband. You Broadband today has over 3,000 kilometres of optic fibre and 6,000 km of last-mile connections and is available in 21 cities.

In 2019, Vodafone Idea attempted to sell its fibre assets and data centre business, but talks fell through due to valuation differences.

(Source: Economic Times)

(Image Credits: Vi)