Fundraising To Conclude In Current Fiscal, Says Vodafone Idea

Vodafone Idea (Vi) exp­ects to conclude its fundraising in the current financial year, chief executive officer (CEO) Ravinder Takkar said on Monday.

He indicated that a tariff hike, which is critical for survival of the sector, would happen soon.

Takkar made the remarks in a post second quarter results conference call on Monday. The company narrowed down its subscriber loss and reported a sequential increase in its average revenue per user (ARPU). There was a limited year-on-year (YoY) decline in its net loss, which stood at Rs 7,132 crore in the second quarter of FY22. Vi continues to make focused investments to increase its coverage and is in advanced discussions with banks and investors for raising debt and equity. Funds will be raised for fresh investments and also for repaying around Rs 6,000-crore debt that is due over the next few months.

Takkar said the government’s telecom reforms package has alleviated investor concerns and Vi expects renewed investor interest in the company.

He said the firm is in the process of updating its business plan and will make a disclosure on fundraising after its finalisation. “We expect to conclude the exercise during this financial year,” Takkar stated.

He added that tariff hikes should happen soon in the backdrop of the telecom ref­orms package. “The time for tariff hikes is certainly appr­oaching,” he said.

Vi’s Chief Financial Officer (CFO) Akshaya Moondra said spectrum dues of around Rs 58,910 crore will be deferred over four years as a result of the reforms package. The company is in discussion with the department of telecommunications (DoT) to determine the amount of adjusted gross revenue (AGR) dues that will get defe­rred. The reforms package will also reduce the number of performance-based bank guarantees that the company provides to the government. The amount covered under the guarantees will come down to 20 per cent.

Vi also expects the government to return bank guarantees in view of the four-year moratorium on payment of spectrum dues. At present, bank guarantees need to be provided for a year before payment of spectrum dues.

Asked about rival Jio’s new smartphone and Airtel’s cashback offer, Takkar said Vi has tie ups with device manufacturers and finance companies that offer easy instalments to customers to purchase a new handset. He said the strategy gives customers a choice of handset and the company is deploying it to ensure conversion of more customers from 2G to 4G.

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor