Vodafone May Acquire You Broadband For Rs 400 Crore to Strengthen their Fibre Optic Network
In order to propagate faster, sharper and efficient 4G connectivity in India, Vodafone is attempting to make their optic fibre network robust. And with this intention, they may acquire You Broadband very soon. As per reports coming in, Vodafone is all set to shell out Rs 400 crore to acquire You Broadband and become a stronger 4G provider in the process.
Persons who are close to the materialization of this mega-deal has said, talks were on since last three months, and right now, documents and financial details are being worked upon.
You Broadband, initially named as Iqara Broadband was launched by British Gas in 2001. Right now, they command 3000 kms of optic fibre and 6000 kms of last mile cables to households across 12 Indian cities. They are officially India’s first ISO accredited broadband service provider and have invested Rs 4 billion till date on their network infrastructure and upgradations.
They have partnered with firms like Motorola, Avvaya, Commscope, Cisco and employ 1400 people across 12 cities in India.
Their presence in Mumbai is significant, as Reliance Jio can now expect more competition in this city.
As per technical experts, having a robust optic fibre network will certainly assist Vodafone to provide faster 4G services- both in mobiles and broadband connections. In fact, Reliance Jio has been doing the same for last few years, as they want better signal emitting towers in urban locations; and optic fibre are one of the best strategies to accomplish that.
As per unconfirmed reports, Investment bank Rothschild are advising Vodafone while ICICI Securities are the investment bankers of You Broadband for this deal.
Will It Technically Work Out?
Although it’s a great initiative and tactical move by Vodafone, as speed quality is solely determine the eventual winner of the fiercely fought 4G battle in India; there are some experts who are stating that Vodafone may lose out this ‘experiment’.
As per a person familiar with technicalities of such mergers, the network protocols adapted by You Broadband is entirely different from Vodafone’s platform. Hence, if Vodafone aims to use You Broadband’s optic fibres for their 4G expansion, then it can cause some technical logjams, and the whole strategy can fail.
Either Vodafone will be required to invest more in order to make the whole network compatible or change their existing protocols to make this merger work.
But none the less, the exponential growth witnessed by You Broadband in cities like Mumbai, Pune and Hyderabad has prompted Vodafone to go with them, and enhance their network even better.
Airtel and Reliance Jio would be closely monitoring this situation; and maybe this acquisition can trigger even more mergers and acquisitions in this space.
We will keep you updated as more details come in.
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