Vodafone Idea Clarifies: No Ongoing Discussions with Elon Musk’s Starlink for a Partnership

A previous report suggested that Elon Musk was considering acquiring a stake in the company to facilitate Starlink’s entry into the Indian market.

India’s Vodafone Idea is not in talks to tie up with billionaire Elon Musk’s satellite internet company Starlink, the telecom operator said on Tuesday, dashing hopes of a revival in the debt-ridden company that had sent its stock soaring.

The clarification came after Vodafone Ideas’ stock surged in the past two sessions on what business magazine BusinessWorld said were “markets betting” that Musk was looking to buy a stake in the company to help Starlink enter India.

“We would like to submit that the company is not in any such discussion with the named party. We are not aware of the basis of the said news item,” Vodafone Idea said in a statement on Tuesday, a day after the Bombay Stock Exchange, where its stock is listed, asked for a clarification on the report.

The BusinessWorld report was published on Friday after Vodafone Idea’s shares surged 21 percent. The stock jumped another 6 percent on Monday, rounding out its busiest sessions in about two years.

However, the stock fell more than 5 percent in heavy trading on Tuesday after the company’s clarification.

Starlink, Musk and SpaceX — Musk’s rocket company that owns Starlink — did not immediately respond to Reuters’ requests for comment.

Vodafone Idea has faced financial challenges, consistently reporting losses since its formation in 2018 through the merger of Vodafone’s Indian unit with Idea Cellular. The company has been losing subscribers to competitors like Bharti Airtel and Reliance Industries’ Jio. The Indian government also holds about a third of Vodafone Idea after converting the company’s dues for using airwaves and spectrum into equity.

Given Vodafone Idea’s financial struggles and substantial debt, analysts like Karan Taurani from Elara Capital consider it an unattractive partner. The company’s challenges include difficulties in raising more capital while servicing a large debt.

In contrast, Bharti-backed OneWeb and Reliance’s Jio Satellite Communications have regulatory clearance to operate satellite services in India. Vodafone, on the other hand, has partnered with Amazon.com’s Kuiper for internet networks in Europe and Africa, but Kuiper does not operate in India.