Since the relief package has been announced, talks about the government getting an equity stake in the telecom companies against some part of their dues has been going on. But according to the recent statements from Ravinder Takkar, MD & CEO, Vodafone Idea, the government is not interested in getting equity of the telecom companies. At the same time, Takkar said in an interview with PTI that the government is focusing on keeping India a three private player market. This rules out the concern for any duopoly between Reliance Jio and Vodafone Idea in the medium or long term.
Vodafone Idea Will Have to Figure Out a Solution Fast
Vodafone Idea will have to figure out a way very fast to find a solution for reducing its debt and also investing in its networks at the same time. If the government at the end of the day isn’t interested in getting equity, it will mean that Vi will have to fend for itself. It can’t bank on the government getting an equity stake against the dues.
But the good thing is, the telco has the time to do that now. There’s no immediate pressure on the payments of the coming dues for the next four years. Further, it can now focus aggressively on expanding the reach of the 4G networks and also work on its 5G strategy for India. Vodafone Idea has the spectrum required, it can also work with other telcos in sharing infrastructure costs for 5G which will be of huge help.
By sharing the infra costs, Vodafone Idea will be able to save money and also roll out new services faster. The same applies to the other telcos as well. Reliance Jio and Bharti Airtel will also be able to save costs and roll out new services at a rapid pace. It will be interesting to look at what government comes up with regarding the same in the near future.