Vodafone Idea (Vi), the third-largest telco in India, is in a better position as it has received the option to defer additional AGR (adjusted gross revenue) dues worth Rs 8,837 crore. This amount is on top of the money that the telco has already deferred for payment. The Department of Telecommunications (DoT) had given the telco an option to defer the additional AGR dues up to FY2018-19. Vi naturally opted for the benefit as it would reduce the pressure of liquidity even further.
Now, Vodafone Idea is certainly in a much better position with respect to where it was last year at the same time. The Indian government is also going to take a major stake in the company against the interest dues, which again will help Vi in many manners. The telco can now focus on earning money and investing it in expanding the 4G mobile networks and save some for the 5G spectrum auction.
Vodafone Idea Can Definitely Make a Comeback
The telco just needs to focus on maximising revenues now and reinvesting them as much as possible. With better mobile networks and enterprise revenues in the near future with 5G, Vi can definitely make a comeback. There are other partnerships that Vi has made, and all of them are integrated into its mobile app. These partnerships can also bring in additional revenues, which can help the telco in expanding its business.
The only thing that Vi has not been able to do for the last few years is raise fresh capital from external investors. But that might change as the industry ARPU (average revenue per user) is rising, and the government is making it easy for the telcos to do business. Vodafone Idea is certainly going to need some support from external investors to boost growth. The telco already has 200+ million customers, and that is more than enough to get back on track with earning profits in the medium-term.
