Vodafone Idea Limited (Vi) is in multiple discussions for securing funds from third-party sources, including banks, promoters, and external investors, after the equity conversion by the government. As per the telco, funding talks have accelerated following the implementation of telecom reforms.
Speaking during the recent earnings call, Akshaya Moondra, chief executive officer, Vi, said that the company’s promoters were also ready to contribute more equity. He informed that any new funding by banks will be used for the deployment of capital expenditure, and not to roll over existing dues.
Regarding the delay in the 5G rollout, Vi does not currently see a major impact on customer churn. Moondra noted that the company witnessed a reduction in churn in the last quarter due to major investments made by competitors in 5G. However, there are challenges for consumers adopting 5G, such as battery usage and understanding 5G tariffs. He said the share of users using 5G-enabled devices to access the network was around 8 per cent. At this point, the unavailability of 5G is not affecting user numbers, he insisted. Moondra added that the competition is giving 5G data for free. This is good for the consumer but as had been pointed out by them, as well, this is not sustainable and 5G data will have to be charged later on.
According to Moondra, the telecom industry is spending between Rs 120-140 billion on customer acquisition. But a lot of this spending is going towards rotational churn. Rotational churn is also present in the mobile number portability (MNP) segment, as well as fresh connections. He also pointed out that tariffs need to go up. Telecom is the cheapest essential service which brings you the maximum value, he said.
