Vodafone Idea (Vi), the third-largest telecom operator in India, was asked by the Securities and Exchange Board for India (SEBI) about the deal with Elon Musk's Starlink. In a filing on the BSE, Vodafone Idea said that SEBI has asked for clarification over the report titled 'Elon''s Starlink Tie-Up Talks In Market Pumps Vodafone Idea To The Skies In India' was published by Businessworld. The cash-strapped telco saw its stock moving from Rs 13.65 on Friday morning to Rs 17.80 on Tuesday because of the rumours of the deal.
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At the time of writing this, the stock is trading at Rs 16.85. Vi's financial situation has been bad for a pretty long time. The report mentioned above said that the govt could sell its stake to Elon Musk's Starlink. Currently, the Indian government is the largest stakeholder in the telco.
In a reply to the SEBI, Vodafone Idea (Vi) said, "In this regard, we would like to submit that the Company is not in any such discussion with the named party. We are not aware of the basis of the said news item." This means that no deal between Vi and Elon Musk's Starlink is happening.
Vodafone Idea's inability to raise funds from investors or lenders has hurt the company's capacity to invest in networks or launch 5G.
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Starlink has not even received the necessary approvals to offer services in India. Further investing in a telco with more than Rs 2 lakh worth of debt might not be the wisest way to enter a new market. Elon Musk is said to visit India in 2024 and the talks around Starlink and Tesla's future in India are definitely expected to take place.
