Vodafone Idea Limited (Vi) expects to close its external equity funding in the third quarter (Q3) of the fiscal year (FY) 2023-24.
Speaking during the recent earnings call, Akshaya Moondra, chief executive officer, Vi, said that after the equity and equity-linked fundraising, the telco will be able to raise debt from a consortium of banks as well. He informed that in the last two months, the company’s discussions with multiple groups of investors on both equity and equity-linked instruments have gained significant momentum. As per Moondra, the company is making good progress and expects to conclude these discussions in the upcoming quarter. He added that in some cases, the discussions have progressed to the stage of due diligence or discussing proposals with the investors.
Further, Moondra said that with the cash generation and payment from promoters, the company will be able to manage its debt in the current quarter. From the next quarter, its debt servicing burden will go down significantly. Overall, the total debt obligation on the company from October to June 2024 is around Rs 27 billion, as against the cash generation of Rs 60 billion, Moondra said, adding that the company will also start making payments to vendors from Q3 FY24.
On the consequences of not meeting the minimum rollout obligation, Moondra said that out of 17 circles where Vi has acquired the spectrum, in two of the circles it has applied for compliance where it has done some minimal investments. In the remaining circles, as per the notice inviting application for the spectrum auction, there is a need to take damages which are applicable.
Additionally, Moondra reiterated that telecom operators need to change the current tariff structure and charge customers based on their usage. At a higher level of data usage, the users should be charged higher rates for telcos to increase their average revenue per user. With regard to the entry-level plan of Rs 99, the company has now reduced the validity of the plan to 15 days from 28 days in 11 circles. In Haryana, the company has removed the Rs 99 plan and increased the tariff to Rs 127 with a validity of 28 days. According to Moondra, this has given the company an uplift in the current quarter. The impact on subscriber churn in the initial period is not much. In Mumbai, it has been three months since the telco changed the plan and is seeing positive results.
