Vodafone Idea says fundraising will end in current fiscal

Vodafone Idea says fundraising will end in current fiscal

Vodafone Idea (VI) expects its fundraising in the current fiscal, Chief Executive Officer (CEO) Ravinder Takkar said on Monday.

He indicated that the tariff hike, which is crucial for the sector's survival, will happen soon.

Takkar made the remarks on Monday in a post-second quarter results conference call. The company reduced its subscriber losses and recorded a gradual increase in its average revenue per user (ARPU). Its net loss was limited year-on-year (YoY) to Rs 7,132 crore in the second quarter of FY22. VI continues to make focused investments to increase its coverage and is in advanced discussions with banks and investors to raise debt and equity. Funds will also be raised for fresh investments and for repayment of debt of around Rs 6,000 crore in the next few months.

Takkar said the government's telecom reform package has eased investor concerns and Vi expects renewed investor interest in the company. 

He said the firm is in the process of updating its business plan and will make a disclosure on fundraising once it is finalized. “We expect to end this exercise during this financial year,” Takkar said.

He said the tariff hike should happen soon in the backdrop of the telecom reform package.  “The time for tariff hike is definitely drawing near.

VI Chief Financial Officer (CFO) Akshay Moondra said spectrum dues of around Rs 58,910 crore will be deferred over four years as a result of the reform package.  The company is in discussion with the Department of Telecommunications (DoT) to determine the adjusted gross revenue (AGR) dues, which will be deferred.  The reform package will also reduce the number of performance-based bank guarantees that the company provides to the government.  The amount covered under the guarantee will come down to 20 per cent.

Vi also expects the government to return the bank guarantee in view of the four-year moratorium on payment of spectrum dues.  At present, bank guarantee is required to be provided for one year before payment of spectrum dues.

When asked about rival Jio's new smartphone and Airtel's cashback offer, Takar said Vi has tied up with device makers and finance companies to offer customers easy installments to buy new handsets.  He said the strategy gives customers a choice of handsets and the company is deploying it to ensure more customers transition from 2G to 4G.

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