Vodafone Idea, a major telecommunications company in India, has officially denied any discussions or plans for a collaboration with Elon Musk’s satellite internet company, Starlink. This statement was issued to clarify the company’s position amidst recent rumors suggesting a potential partnership between the two entities.
The rumors, which hinted at Elon Musk considering buying a stake in Vodafone Idea to facilitate Starlink’s entry into the Indian market, led to a surge in Vodafone Idea’s stock prices in the preceding sessions. However, following the company’s clarification, the stock experienced a significant decline. Vodafone Idea’s shares dropped by 6% on Tuesday, with the stock reaching a low of Rs 15.96 on the Bombay Stock Exchange (BSE). This decline was in line with the broader market trend, as the BSE Sensex also closed lower.
Vodafone Idea emphasized its commitment to comply with the Securities and Exchange Board of India (SEBI) Listing Regulations and stated that it was not aware of the basis of the news item which sparked the initial speculation. The company reassured that it would keep the stock exchanges informed of all price-sensitive information.
The speculation was initially fueled by a report from BusinessWorld, which suggested that the Indian government might consider selling its 33% stake in Vodafone Idea to Elon Musk for Starlink’s entry into India. However, Vodafone Idea’s denial of these reports indicates that there are no ongoing negotiations or talks with Starlink or any related parties at this time.
In the broader context, Starlink, owned by Elon Musk-led SpaceX, has been eyeing the domestic telecom space in India. Last year, the company reportedly applied to the Indian National Space Promotions and Authorisation Centre (IN-SPACe) for clearance to set up earth stations in India. However, stringent regulations have delayed Starlink’s entry into the Indian telecom sector, and in 2022, the government asked Starlink to return pre-selling/booking money to consumers after the company did not receive the required licenses from the Department of Telecommunications.
The recent Telecommunication Bill, 2023, introduced in the winter session of parliament, might pave the way for companies like Starlink to enter the domestic telecom sector, as it provides clarity on the spectrum for satellite communication services and empowers the Central government to allocate spectrum on an administrative basis for satellite broadband services.
This situation highlights the dynamic nature of the telecommunications industry in India and the global interest in this rapidly evolving market.