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

Follow Us

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.

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.

Reported By

Telecom Analyst

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.

Recent Comments

TheAndroidFreak :

Happy to port back into Jio instead of Airtel.

Airtel and Jio Lead Wireless Subscriber Growth in February 2025,…

Shivraj roy :

which weed you smoking bro?

Vodafone Idea the Only Telco to Lose Active Users in…

TheAndroidFreak :

Yes for 12 hours. Jio is not unlimited. 2.5GB per day is enough for me. 2GB atleast on Vi.

Vodafone Idea the Only Telco to Lose Active Users in…

Rohit Kumar :

I had said na earlier bsnl ka bas season chalta h jab tariffs hike hota h tab. Baki jisne ek…

Airtel and Jio Lead Wireless Subscriber Growth in February 2025,…

Saravanan :

1. Vi 4g plans are costlier than 5g plans of other networks. 2. Other services like missed call alert and…

Vodafone Idea the Only Telco to Lose Active Users in…

Load More
Subscribe
Notify of
guest
16 Comments
newest
oldest most voted
Inline Feedbacks
View all comments