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NEW DELHI : Vodafone Idea Ltd promoters are ready to put in additional equity investments, chief executive Akshaya Moondra said, adding that discussions with external investors have picked up pace over the past month after the conversion of equity by the Indian government, with at least three such ongoing discussions.

In a conference call after its March quarter earnings, the top boss of the Aditya Birla Group-promoted carrier said that it was working to raise funding from external investors, which was held up due to a delay in the equity conversion by the government.

“Promoters have contributed equity in the past, and they are also ready to contribute some more equity. The third leg of funding has to come from external investors to bring in equity, and I would say currently, multiple discussions are on, and these discussions have become active in the last one month or so after the government (equity) conversion. We are progressing well on these at least three discussions which are on, and we expect to progress on this and conclude funding," he said.

The chief executive added that talks also picked up pace after Aditya Birla Group chairman Kumar Mangalam Birla returned to the carrier’s board. Moondra clarified that it was continuously engaged with the telecom department–the single largest shareholder–and was updating them on all developments, including improvements in operational efficiencies and the need for investments to get meaningful growth.

The comments come after Mint reported, in separate reports, that Vodafone Idea was working on a revival plan which will be shared with DoT and that the government was concerned about the delay in promoters putting in additional equity as was committed when the government took up 33% equity in the carrier in lieu of interest on dues of 16,000 crore of spectrum payments and AGR payments that were due to the government.

Moondra noted that the launch of 5G services, arrest of customer decline and increase in capex to address capacity constraints will get resolved once external investments into Vodafone Idea come in. “Our capex in any 5G will be dependent on new funding. The plans that we have shared with the banks and investors include 5G investments and a good amount of 5G coverage, and we will be executing and implementing that immediately once the funding is in place," he said.

He also added that the carrier was in ongoing discussions with banks for operational funding for capex, which will be directed towards ramping up 4G coverage that has been stalled for the past 1.5 years, impacting its position among the competition.

“We are confident that the investment coming on, we’ll be able to make significant improvements," he said.

On servicing bank loans, Moondra said that Vodafone Idea would be able to pay up 8,000 crore of the 11,500 crore bank debt in FY24 and the remaining 3,500 crore in the consecutive year.

Moondra reiterated the need for tariffs to rise and tariff structures to move towards higher usage meriting higher payments by customers.

Vodafone Idea also reduced the validity of its lowest plan of 99 for 28 days to 15 days. Moondra added that the carrier had removed some loss-making customer cohorts to reduce costs of customer acquisition.

Vodafone Idea narrowed losses to 6,418 crore for Q4FY23 from 6,563 crore in Q4FY22 and 7,990 crore in Q3FY23. The loss-making carrier improved quarterly revenues and recorded growth in annual revenue for the first time since the merger of Vodafone and Idea Cellular in 2018. Annual revenue rose 9.5% to 42,180 crore from 38,520 crore in FY22 on the back of tariff hikes, better subscriber mix and 4G subscriber additions of 4.6 million in the year.

ABOUT THE AUTHOR
Gulveen Aulakh
Gulveen Aulakh is Senior Assistant Editor at Mint, serving dual roles covering the disinvestment landscape out of New Delhi, and the telecom & IT sectors as part of the corporate bureau. She had been tracking several government ministries for the last ten years in her previous stint at The Economic Times. An IIM Calcutta alumnus, Gulveen is fluent in French, a keen learner of new languages and avid foodie.
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Updated: 26 May 2023, 11:17 PM IST
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