Bharti Airtel is ready to go ahead with monetising stake in its online banking arm - Airtel Payments Bank if such a situation arrives. It will be the telco’s way to arrange for resources in case it needs it. Neither of the operators got any relief from the adjusted gross revenue (AGR) dues decision made by the Supreme Court. While it is more devastating for Vodafone Idea, even Bharti Airtel can face the financial heat because of the decision by SC if the telco’s profits dip even further.
Gopal Vittal Hoping for Government to Aid Vodafone Idea and the Sector
Vodafone Idea has been under great financial stress for quite some time now. The telco hasn’t seen profits in years, and if things continue the same way, it can be catastrophic for the company in the short term.
According to an ET Telecom report, speaking at the first quarter’s earnings call, Gopal Vittal, CEO of Bharti Airtel, said the government should come out with a relief package for the telecom sector as soon as possible. He expressed that there should be at least 3 operators in the industry at all times.
Without naming Vodafone Idea directly, Vittal said that India’s current structure of three private players and one state-run telco is very important to maintain.
This will only happen if Vodafone Idea is able to secure an investor or sees continuous high average revenue per user (ARPU) customer addition to see some profits in its books. Vi needs a steady cash flow to meet its liabilities and expenses, all in the short term. Time and again, Airtel has expressed that it wants the current market structure to sustain, and it would not be good if Vi had to go out because of the financial issues.
The government is indeed working on a relief package, and something solid should come out very soon.