Is Vodafone Idea Eyeing Tariff Hikes Soon?

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Vodafone Idea

Vodafone Idea has been facing gloomy days since the AGR dues matter started in the Indian telecom space. Over the period, Vodafone Idea has faced financial distress, funding default, subscribers loss that has weakened the backbone of the entity. It would be too early to say that Vodafone Idea will kneel down and exit from the Indian telecom space. If government jumps in and aid the telco by providing a relief package, the telecom space in India will not convert into a duopoly. However, if Vodafone Idea has to revive on its own, the journey to lower the financial burden and clear the AGR dues will be full of challenges.

Vodafone Idea Tariff Hike Might be Introduced

One of the ways through which Vodafone Idea can lower the financial distress and keep the business going is by introducing tariff hikes. Recently, Bharti Airtel has also announced developments around the tariff hike. However, looking at the competitive telecom space in India, Vodafone Idea might witness a decrease in subscriber addition. Alternatively, Vodafone Idea is eyeing to earn from both retail and corporate customers. The telco giant has recently released new enterprise postpaid plans that are packed with intriguing benefits and services.

Investors Might Jump in and Save Vodafone Idea

In case you are not aware, Vodafone Group Plc and Aditya Birla Group hold 45% stake and 26% stake respectively in the entity. Since the plans of getting an investor have been a long lost dream for Vodafone Idea, the prime investors might jump in and dilute their stake towards investors who can take over the entity and manage the operations.

The major reason behind diluting the stake would be to lower the debt and get rid of financial distress. Since the verdict of the Supreme Court was rolled out, the funding plans of Vodafone Idea seems to be suffering. For the past few months, Vodafone Idea is extensively working on getting funding of Rs 25,000 crore from different companies. However, the deal is still under the planning stage, and no final verdict has been rolled out regarding the same.

We can expect that if the funding plans of Vodafone Idea are executed, the telco might stand strong and slowly lower the massive debt. In immediate arrangements, Vodafone Idea has to repay 24,000 crores towards AGR dues which can be paid easily if the funding deal is signed. Currently, with a cash reserve of just Rs 350 crores, Vodafone Idea has a debt of Rs 1.8 lakh crore in which Rs 58,254 crores is accounted for AGR dues. In my opinion, the government might extend their support in keeping the Indian telecom space a three-player market and eliminate the situation of bankruptcy.

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Shrijan loves the process of creating content in various verticals, whether it be words, sounds or videos. He's also inclined towards digital marketing and tech industry developments. The art of creation always triggers his interest.

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