Vodafone Idea’s Fate Depends on them Raising Funds

Vodafone Idea (Vi), the third-largest telecom operator in India, has to find a way to optimise costs and add subscribers in the short term, but the most important thing that the telco has to do is raise funds. Vi has been shouldering losses every quarter and financial year that goes past us. While the government looked after the industry’s liquidity concerns with a relief package in 2021, it isn’t enough for Vi to stay afloat and make a difference. The TRAI data for July 2023 is out and it shows that Vi lost 0.43 million active wireless users during the month. While the active wireless users’ loss has slowed MoM (month over month), a loss is still a loss.

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Consumers waiting for 5G have no option but to turn to either Airtel or Jio. Vi customers not only don’t have 5G but there’s no Wi-Fi calling support in many major telecom circles for Vi users. The telecom operator is in “desperate” need of fundraising. Regardless of how the money comes, it has to come. The telco’s primary objective would be to raise funds through equity, as its existing debt has already crippled the ability to invest in networks and services.

The promoters aren’t pitching in too much here. All those promises to the government about successful fundraising post the debt to equity conversion look feeble now. One of the promoters, Vodafone UK has already displayed its intent of not helping Vi anymore by taking the value of its Indian unit as nil in the books.