Vodafone India has acquired You Broadband, a regional internet service provider (ISP), for Rs 350 to Rs 400 crore, Hindu Business Line reported.
Rothschild India and ICICI Securities are the advisors for the deal. There is no confirmation from Vodafone and You Broadband. The report says an official announcement is expected shortly.
You Broadband has more than 3,000 km of optic fiber cable and 6,000 km of last mile co-axial cable network and employs about 1,400 people.
Founded in 2001, You Broadband has 5 lakh subscribers as on January 2016. The Mumbai based company is a category A ISP and offers high-speed internet and voice services to home users, small businesses and corporate customers across 12 cities, including Hyderabad, Bengaluru, Chennai, Pune and Surat.
The leading wired broadband service providers in India are BSNL with 9.9 million connections, while Bharti Airtel has 1.68 million, MTNL has 1.12 million, Atria Convergence Technologies has 0.89 million and YOU Broadband has 0.51 million broadband subscribers as of January 2016, according to TRAI.
Set up by British Gas as Iqara Broadband, the privately held YOU Broadband has financial backing of funds advised by TRG Management.
At present, Vodafone India is not a major player in the Indian 4G broadband space. After investing $20 billion, Reliance Jio Infocomm is expected to launch 4G before the year-end. Bharti Airtel and Idea Cellular are already making huge investments in 4G networks.
Bharti Airtel recently announced spectrum deals with Aircel and Videocon Telecom. The Sunil Mittal promoted company has also acquired Qualcomm’s 4G license in India. Reliance Jio and Reliance Communications have 4G spectrum deals.
Vodafone India needs to expand in the Indian broadband space. It is also building its presence in the domestic enterprise communications market in a big way. Since You Broadband can be a triple play service provider, investment in broadband space will make sense for Vodafone to improve ARPU in India.
Vodafone in broadband
Vodafone earlier said its fixed service revenue grew 3.7 percent in Q3 fiscal 016 (3.1 percent in Q2), driven by strong consumer broadband customer growth, particularly in high speed fiber and cable services which grew by 379,000 to 5.9 million in the third quarter.
Vodafone added 97,000 fixed broadband customers in the quarter in AMAP region.
Vodafone has 13 million broadband customers globally. Out of this, Vodafone has 12 million broadband customers and 9.4 million TV customers in Europe.