‘I would say that asset sales will be fairly low in the list of priorities right now, and the focus is on improving customer experience,’ Voda Idea managing director and CEO Ravinder Takkar said
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Vodafone Idea Ltd will review the terms of its planned fund-raise and may drop a plan to monetize assets, managing director and chief executive officer Ravinder Takkar said, after last week’s telecom rescue package erased a question mark over its survival.
On 16 September, the government announced a four-year moratorium on regulatory dues, permitted 100% foreign direct investment in telecom through the automatic route, and redefined adjusted gross revenue (AGR).
“We are still waiting for the finer details of the recently- announced telecom package, but it’s fair to say that most investor concerns around the future of the company have been addressed," Takkar said in an interview. “The government has clearly indicated that it wants to ensure the viability of the industry, and I can tell that discussions with investors will be very different from what we have had in the past, irrespective of who the investor(s) is finally," he added.
Vodafone Idea, which decided to sell its optic fibre assets and data centres last year to raise money, may put the plans in the back burner as well. “I would say that asset sales will be fairly low in the list of priorities right now, and the focus is on improving customer experience," Takkar said.
He said also that the fund-raising process will start in the coming months and will be tethered to a new business plan that the company will craft, once details of a potential conversion of some of its government dues to equity become clear.
On 4 September, the board of Vodafone Idea approved plans to raise up to ₹25,000 crore.
Over the past year, the telecom operator has held talks with several strategic and financial investors to raise funds through a mix of equity and hybrid debt.
The negotiations have, however, invariably stalled over the question of its survival, given its annual regulatory dues of ₹25,000 crore over the next decade.
However, with the government’s relief measures in place, promoters who had earlier refused to invest any more in the company may be having a rethink.
Mint reported on 21 September that Aditya Birla Group and Vodafone Plc were exploring the possibility of a further equity infusion, which would shore up Vodafone Idea’s finances and boost market confidence before an external fund infusion.
“We will seek board approval to raise funds and our promoters will get a chance to participate in the fundraising round provided they want to," Takkar said.
“The entire money raised will be used in technology upgradation and improving infrastructure and will allow us to stay competitive like we have always," Takkar added.
Vodafone Idea has been bleeding subscribers for several quarters.
In June, it lost about 4.28 million subscribers, reducing its user base to 273 million, while rivals Reliance Jio and Bharti Airtel added 5.46 million and 3.81 million users, respectively.
“Almost 90% of spectrum is now deployed for 4G services, and despite losing customers on an overall basis, we have added new subscribers in the 4G user base, and we expect the numbers to stabilize," Takkar said.
“Some of our customer losses happened because we were essentially two companies and also because there were some challenges on service quality. Our customer base is now much more stable and as we invest more, we are optimistic that the situation will improve significantly," he added.
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