Vodafone, India’s second-largest telecommunications service provider by number of users, will invest Rs.13,000 crore or $2 billion on capacity expansion and new business initiatives.
Vodafone, which ranks behind Bharti Airtel in the Indian telecom market, is already the largest FDI investor in the country with investments exceeding Rs.1,11,000 crore since starting its Indian operations in 2007.
Vittorio Colao, Vodafone Group Plc CEO, committed to the latest investment during his meeting with Prime Minister Narendra Modi in London on Friday. The announcement of the increase in investment comes as the U.K. major readies to tap the Indian capital market with an initial public offering.
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“At Vodafone, we are enthused with the PM’s vision for ‘Digital India’ and ‘Make in India’. Vodafone India serves over 188 million citizens, of which almost 100 million are from rural areas. As the co-creator of the telecom ecosystem, a catalyst of the telecom revolution in India and being committed for the long term, we are ideally poised to partner the Government of India in fulfilling these important initiatives,” Mr. Colao said in a statement. “We are pleased to announce our enhanced commitment to India,” he said.
The planned capacity expansions and investments in the high-end technology centre and customer service centres will create opportunities for employment and for skilling and training India’s rich talent pool. Vodafone will accordingly increase its staffing levels to 15,000 employees over the next two years, the company said in the statement.
“We have recently begun preparations for a potential IPO of Vodafone India, subject to market conditions,” the London-based Group said earlier this week.
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Vodafone’s India business, in addition to being the highest contributor to Vodafone Group’s service revenue growth, has the largest customer base, is the largest data traffic market (by volume) and the third largest contributor to Vodafone Group’s service revenues.
Vodafone India reported a 9 per cent year-on-year increase in first-half operating profit, driven by strong growth in data traffic and revenue.
India also signed five other deals, including in clean energy and financial services amounting to 9 billion Pounds during Mr. Modi’s visit.