Vodafone permitted to proceed with acquisition of You Broadband
India's Foreign Investment Promotion Board (FIPB) has approved Vodafone's plan to acquire 100% stake in TRG Capital-owned You Broadband India, in a share transfer deal worth INR55.09 crore ($8.4m). The acquisition gives Vodafone access to spectrum owned by YOU Broadband, and allows the telco to formally enter the wired broadband space.
Vodafone’s proposal to acquire 100% stake in TRG Capital owned You Broadband India has been approved by the FIPB last week “by way of transfer of shares from resident shareholders and non-resident shareholder”. The stake is worth Rs 55.09 crore. Vodafone had entered into talks to acquire YOU Broadband for a reported value of around Rs 350-400 crore in March last year; the deal was closed in April last year. As of December 2016, YOU Broadband had 0.6 million subscribers on its network and is also one of the top 5 broadband providers in the country in terms of subscribers. It also claims to have around 3,000 km of optic fiber cables, and 6,000 km of last mile cables to homes across 12 cities including Mumbai, Bangalore, Gurgaon, and Chennai. It also claims to have collaborated with companies like Motorola, Avvaya, Commscope, Cisco to provide their services across the 12 cities they operate in. Vodafone might look into launching fiber soon On the other hand, Vodafone is a telecom operator focused on cellular services. It reported 65 million data subscribers during December 2016. The YOU Broadband acquisition will work in favour of Vodafone in two different ways: Entry into Wired broadband space: With the acquisition of YOU Broadband, Vodafone has formally entered the wired broadband space. After Reliance Jio launch, which is also planning on a fiber service, more telcos have followed by increasingly investing in fiber to take on the new entrant. Idea claims to have a fiber coverage reaching an…

Please subscribe login to read the full story.