Vodafone Idea Can Compete at Par with Jio, Airtel if Things Fall in Place: Opinion

Vodafone Idea needs funding from external investors. The promoters are not going to invest any more of their cash here. The funding needs to come from outside only. But Vi is stuck on this part because of the delay in the government's side of things. The government hasn't converted the interest dues of Vi into equity for itself in the company.

Highlights

  • Vi needs funding.
  • Vodafone Idea needs new 4G subscribers.
  • ARPU is one of the biggest factors an investor might see before giving the company money.

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Vodafone Idea

Vodafone Idea (Vi), the third-largest telecom operator in the country, is not considered equal to Jio and Airtel anymore. While the telco has the fastest 4G network, it is of no good if the consumers don't like it enough. Vi needs a lot of high-paying customers and funding to turn things around. 5G is another prospect for the telco to make things good, but for that as well, there's a need for funds from investors. The money that Vi is currently making from its subscriber base is just not enough. The telco needs a lot more going for it to be able to compete at par with Jio and Airtel. It is not impossible, but it isn't going to be easy either.

Vodafone Idea in Desperate Need of Funding

Desperate is the correct word to choose here. Vodafone Idea needs funding from external investors. The promoters are not going to invest any more of their cash here. The funding needs to come from outside only. But Vi is stuck on this part because of the delay on the government's side of things. The government hasn't converted the interest dues of Vi into equity for itself in the company. Once that is done, Vi is hopeful of raising money successfully.

India is a three-private telco market right now. Vi is the only private company that's not making any real money, though. The telco can be a success, but a lot of things need to happen together and in the right manner. Vi also needs to figure out how to add more 4G subscribers into its network fast. At the same time, the telco needs to hold down the subscriber churn rate. Vi isn't in a position to lose its high paying 4G customers. Despite the tariff hike, Vi is the only private operator in India whose ARPU (average revenue per user) figure hasn't touched Rs 150 mark. The other two operators are well on their way to surpassing the Rs 200 ARPU figure.

ARPU is one of the biggest factors an investor might see before giving the company money. Vodafone Idea needs to become super efficient in handling things and use the resources in hand carefully to get the best out of them. It is definitely a company that can compete with Jio and Airtel at par. But that would only happen if the telco could aggressively change things around and get investors' support as well.

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Tanay is someone with whom you can chill and talk about technology and life. A fitness enthusiast and cricketer, he loves to read and write.

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