Vodafone India may sell its Rs 1200-cr worth data center to reduce debts

Vodafone India may sell its data center, built at a cost of Rs 1,200 crore, in Navi Mumbai, to further reduce its debt, even as the British parent of the company converted already converted debt worth Rs 47,700 crore to lighten the balance sheet, Economic Times reported.

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Vodafone Group has decided that its Indian subsidiary would divest all non-core assets, including the data centre, the report said, adding that “two strategic companies are interested in buying it out but at cost for Vodafone.”

“The data centre is now seen as a cost centre which won’t increase (Vodafone’s) appeal, but in partnership with a bigger strategic could mean stick enterprise business,” a source was quoted as saying by the publication.

The data center hasn’t been launched commercially by the country’s second largest telecom operator, which in a statement to the publication said that it is currently in the process of gaining the requisite approvals. “We intend to launch the data centre shortly.”

The value of the facility however may increase after the commercial launch and could command a premium from buyers who are at the moment only offering to buy it at cost, another person told the publication.

The data center, commissioned under the former CEO Marten Pieters, was part of Vodafone’s strategic plan to get enterprise customers, especially the booming medium segment and startups. The facility is larger in capacity with better technology because it has no legacy and been geared for cloud services too.

The company already offers enterprise services to big and large enterprise through its enterprise arm, Vodafone Business Services (VBS). It competes with the likes of Bharti Airtel, BSNL, Reliance Communications, Tata Teleservices and Tata Communications that offer enterprise services in the country.

Vodafone has recently spent Rs20,280 crore for acquiring 4G airwaves in the just ended spectrum auction, which will further increase debt on its books. The telco is also preparing for its initial public offer.

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