Vi Doesn’t Exist in Large Parts of the Country: Sunil Bharti Mittal

Reported by Tanuja K January 18th, 2024 at 02:23 pm

When asked about whether a duopoly is imminent in India, Mittal reiterated that India needs a mix of three private players and one public sector player. The business tycoon mentioned how in Africa, most countries are down to two operators.

Highlights

Vodafone Idea (Vi), the third-largest telecom operator in India, has been struggling to raise funds from investors.
Vi has not been able to invest in building network capacity and coverage in more parts of India, thus, falling behind its competitors.
The government has supported Vi by converting a large amount of outstanding dues into equity, becoming the largest shareholder in the telco.

vi doesnt exist in large parts of

Vodafone Idea (Vi), the third-largest telecom operator in India, has been struggling to raise funds from investors. Due to a weak financial situation, Vi has not been able to invest in building network capacity and coverage in more parts of India, thus, falling behind its competitors. Sunil Bharti Mittal, chairman of Bharti Enterprises, in a conversation with ET on the sidelines of the World Economic Forum Annual Meeting at Davos, talked about many things related to Airtel's business and the Indian telecom market. However, one key thing that he mentioned was Vi's declining subscriber market share.

He told the publication, "Vi is falling behind —there’s been a lot of market share loss…in large parts of the country, (I’m sorry to say) they don’t exist anymore."

When asked about whether a duopoly is imminent in India, Mittal reiterated that India needs a mix of three private players and one public sector player. The business tycoon mentioned how in Africa, most countries are down to two operators. He believes that whenever a country has too many players, it leads to fragmentation of infrastructure and spectrum.

Mittal said, "So for India, three private and one public sector (player) is an ideal outcome, but it can end up being two private and one public sector…because BSNL is now putting up a 4G network and is talking about 5G in the not-so-distant future."

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The government has supported Vi by converting a large amount of outstanding dues into equity, becoming the largest shareholder in the telco. However, Mittal believes that ultimately, it is in the hands of the promoters of the company to take the final call. The promoters have shied away from infusing any meaningful capital into the company.

According to Mittal, someone needs to invest $7-9 billion to fill the funds gap for Vi and then sit patiently. Vi still has 200 million customers, remarked Mittal, so an investor that is investing, has to sit for a few years with negative cash returns to see any good future.