New Delhi: Vodafone Idea Ltd, India’s struggling third largest mobile operator, Monday said 10 years granted to telcos to clear past statutory dues was ‘a good outcome’. However, Vodafone India also asserted that mobile tariffs need to be raised for the industry to survive.
The company also unveiled a new brand identity, ‘Vi’ as it looked to regain lost market share through an image makeover.
“The brand integration marks the completion of the largest telecom merger in the world. It also sets us on our future journey to offer world class digital experiences to one billion Indians on our strong 4G network,” said Ravinder Takkar. He is the MD and CEO of Vodafone Idea Ltd. Takkar gave the information at a call with media to unveil the new brand identity.
Takkar, however, did not clearly say if the company – which had about 280 million subscribers as of June – would have enough cash to pay all of its remaining over Rs 50,000 crore Adjusted Gross Revenue (AGR) liabilities.
“Besides the 10 years part, which was an important element of the judgement, there is also an initial payment which was 10 per cent. We have already paid that 10 per cent that have been given by DoT (Department of Telecom). So, our first payment based on the outcome of the judgement is going to be in March 2022 of the first of the 10-year installments, which I think is eventually a good outcome, and we are happy with that,” Takkar informed.
Last week, the board of Vodafone Idea Ltd (VIL) approved a fund-raising plan. It involves a mix of debt (up to Rs 15,000 crore) and equity (up to Rs 15,000 crore), totaling a maximum of Rs 25,000 crore. The plan is to be taken up for approval September 30 at the company’s AGM.
To a question on whether Vodafone Group Plc intended to participate in the upcoming fund raising and about promoters’ (Vodafone and Aditya Birla Group) overall plans, Takkar said it was something for promoters to deliberate and decide on.
“It’s difficult for me to answer what the promoters will do. We have tremendous support from both the promoters and they have continued to, all the times, give us all the appropriate support and we have no reason to believe that any of that support is going to change or come down in the near future, or ever at all,” asserted Takkar.
Citing the massive growth in data and voice usage over the past years, Takkar said tariffs must go up initially up to Rs 200, which would be ‘an important step’ and eventually to Rs 300 levels. Tariff hike is ‘a well-known topic within the industry’, he said ruing that low rates in the Indian market are ‘unsustainable’.