Reliance Jio entry made Vodafone Group write off EUR 5 billion for India unit

In an interesting turn of events, UK-based Telecoms Group Vodafone has recorded non-cash impairment charge of 5.0 billion euros during the first half of the fiscal ended September 30 in respect for its Indian unit. An increased competition due to the entry of Mukesh Ambani-led Reliance Jio Infocomm has resulted in this write-off, the company said.

tower-india-5G

In a statement, Vodafone Group said that the entry of Reliance Jio has entry with commercial price plans at a significant discount to prevailing market pricing is resulting in competitive responses from other operators, which has created a high degree of uncertainty over a range of commercial planning assumptions including future pricing, profitability and market structure.

“There are a wide range of potential outcomes which the group has had to assess to derive its current view of future business performance and cash flows for impairment valuation purposes. To the extent that future commercial outcomes are different to those assumed within our plan, this valuation may need to be revised,” Vodafone said on the impairment charges.

“Competition in has increased in the year, reducing revenue growth and profitability. We have responded to this changing competitive environment by strengthening our data and voice commercial offers and by focusing our participation in the recent spectrum auction on acquiring frequencies in the more successful and profitable areas of the country,” Vodafone Group Chief Executive Vittorio Colao said in a statement.

During the six months ended 30 September 2016, Vodafone recorded impairment charge of 6.37 billion euros in respect of the Group’s investment in India which, together with the recognition of an associated 1.37 billion euros deferred tax asset, led to an overall 5.0 billion euros reduction in the carrying value of Vodafone India, the telco said.

READ:  Reliance Jio is Now the Leading Telco by Subscriber Base: A Step by Step Analysis of How it Got There

Furthermore, the telecom group has also deferred its IPO of India unit, and said that the IPO is unlikely to take place during the current financial year due to the market conditions.

Read more on:

Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.

16
Leave a Reply

avatar
Photo and Image Files
 
 
 
9 Comment threads
7 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
15 Comment authors
JagannathkumardragonmonkVinitRajesh Recent comment authors
newest oldest most voted
Vinit
Vinit

Idea launched 4G in Pune and Nashik.

Khanin nath
Khanin nath

Jio to Jio call not connecting but jio to other network connect call instantly on Redmi 3S device. Any one knows how to fix it?

dragonmonk
dragonmonk

Sounds like a Jio network issue. Talk to Jio customer care.

Recent Posts

Bharti Airtel Data Add-Ons for Prepaid Users Start at Rs 28: Pricing and Benefits Detailed

Bharti Airtel is currently providing five data add-ons to its prepaid subscribers in the country. The prices of these data...

BSNL Annual Broadband Plans Above Rs 399 Will Now Ship With Free Amazon Prime Membership

State-run telco, BSNL, today officially announced that its annual broadband plans priced over Rs 399 will now ship with Amazon...

Forthcoming Android Version Will Just Be Called ‘Android 10’

Google, which named its operating system versions after tasty treats like Lollipop and KitKat, has announced that it will just...