CEO Akshaya Moondra says funding talks are going on rapidly with funding sources, and promoters are willing to dilute more equity.
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Vodafone Idea, India’s only private lossmaking telecom, is still in discussions with banks and other potential finance sources, according to VI’s CEO Akshaya Moondra on Friday.
Moondra stated on a post-result analyst call that the company’s promoters were also prepared to provide further equity. Less than two years after quitting the board as additional director, former chairman Kumar Mangalam Birla returned in April, showing a positive sign for the telecom.
Following the government’s equity conversion, “multiple discussions are currently underway with regards to securing funding from third-party sources,” the CEO stated. He claimed funding negotiations have quickened with the reform package now in place. Though, he didn’t include presenting the government with a plan or even an approximate schedule for when the business might be able to seek new funding.
The company has been mostly silent about a prospective new investor in the company for the previous two years, thus it is recently reported that Vodafone Idea is in advanced talks with three investors who may put equity into the company.
Telecom company is also taking steps to increase its ARPU (average revenue per user) by decreasing the validity of its pre-paid packs.
Is VI ready to launch 5G?
According to the company’s announcement on Friday, any further bank financing will be utilized to deploy capital expenditures rather than roll over past-due obligations.
“We have plans that include 5G. The establishment and growth of 5G networks are the main objectives of the proposals we have presented to banks, “Moondra added.
According to him, about 8% of consumers access the network using 5G-capable devices. He claimed that the lack of 5G is currently having no impact on the number of users. The business previously said that it was in constant contact with network suppliers to confirm its 5G rollout plans.
“The opposition is providing 5G data at no cost. The consumer will benefit from this, but as they also noted, it is not sustainable, and 5G data will eventually need to be paid for, he said. Reliance Jio and Bharti Airtel, VI’s two primary rivals, have already begun offering 5G services in 4,333 and 3,500 locations, respectively.
The company would have to roll out 5G services by September following current government regulations on minimum service requirements. Failure to comply carries a financial penalty, and the given spectrum may even be taken away if the service launch is delayed by more than 52 weeks.
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Recapturing sluggishly
Corporate statistics made public the day prior revealed that company’s consolidated net loss was 2.2% lower year over year in Q4Fy23, coming in at Rs 6,418 crore. Annually, the net loss decreased from Rs 7990 crore by 19.6%.
On Friday, Moondra emphasized that FY23 marked the first time since Vodafone and Idea’s merger that the company has experienced a revenue increase of 2.8%. On an annual basis, gross revenue climbed to Rs. 10,531 crore in the fourth quarter, but EBITDA fell by 9.4% to Rs. 4,210 crore.
Additionally, the average daily revenue increased by 1.4% in Q4, the eighth consecutive quarter of growth. Annually, the ARPU stayed constant at Rs 135 while increasing 8.8% on an annual basis. In FY23, the company spent Rs 8000 crore on debt servicing.
