Vodafone - Idea to lose more subscribers

Vodafone Idea has shut its 1,145 sites on network during the second quarter. However it added 11,000 broadband base stations during the second quarter. Vodafone Idea’s inadequate network investments will thus result in poor network experience and will further increase subscriber losses in the country.

Net loss was 254.6 billion rupees ($3.4 billion) in the three months ending June. It took a one-time charge of 194.4 billion rupees for back fees paid.

Analysts at Edelweiss said that inadequate investments in the network is resulting in lower engagement, reflected in data and voice volume decline, leading to subscribers choosing other networks. However. this problem can be solved only by increasing tariff and fund infusion. The continued subscriber losses and the moderate growth in ARPU strengthen the case for a significant tariff hike, to avoid a duopoly market.

However, Idea (Vi) said its plans to raise as much as 25,000 crore; and are getting a positive response and are set to conclude in two to three months.

Vi has reached out to credit funds such as Oak Hill Advisors, Marathon Asset Management, Spectrum Asset Management, Anchorage Capital and Providence Investment Management as well as private equity firms such as Blackstone and asset reconstruction companies for raising the funds that will be used to expand networks and pay adjusted gross revenue dues.

Vi managing director Ravinder Takkar said " We are in discussions with several interested parties to raise funds through the debt and equity routes. The interest levels have been very good and the ongoing discussions are progressing well. We hope to conclude the fund-raise in two to three months at most. We are very optimistic on this score. Vi won’t shy away from increasing the currently unsustainable mobile tariffs. We have taken the lead on hiking tarif."

Vodafone and Idea had announced its new unified brand identity by renaming all its products under a new name and logo “Vi” in September 2020.

Source - Economic Times