Vodafone Idea's Chief Executive Officer, Akshaya Moondra confirmed on a recent company call with the investors and analysts on September 23, 2024, that Rs 170 billion towards government debt could be converted into equity.
"The total payout to the government is Rs 43,000 crore annually, or Rs 430 billion. Out of that, about Rs 170 billion is from deferred series of instalments which are covered by the reforms package and which can be converted," said Moondra. The remaining Rs 260 billion will be the regular payouts.
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After the Supreme Court of India decided not to entertain the curative petition for recalculating the AGR dues of the Indian telecom operators, the telco said that it had initiated a fresh conversation with the government.
Ravinder Takkar, non-executive Chairman of Vodafone Idea Limited added to this by saying that this doesn't include any potential relief on AGR (adjusted gross revenue) that the government may offer to the telco.
The long-term business plans of Vodafone Idea will remain unaffected by the decision of the Supreme Court, said Vi's top management on the call. In fact, the company said that the discussions with the banks for fundraising via debt didn't include any relief on the AGR matter in the first place. So the long-term plans will continue to be executed by the company.
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Vodafone Idea will start getting deliveries of the telecom equipment they ordered recently in the second half of the next quarter, said Vi's CEO. The deployment will start from that point onwards on full flow. Also, the company is looking to deploy 5G in all 17 priority circles, the focus will be on identifying the right areas within these circles to deploy.
Apart from the 4G and 5G radio capacity, Vi is also going to enhance the core and fiber capacity as part of their capex plan, said Moondra. One of the big statements from the management was that the next tariff hike is expected after 15 months from the last hike. So that's the winters of 2025.
Along with this, the government is likely going to remove the need for bank guarantees, said Vi's management. The bank guarantees are a thing of the past now, and they don't help anyone, said Vi. Also, Vi has made it cleared to the government that they are not even in a position to offer bank guarantees. The decision around this is expected to come in the near future.
