Vodafone Idea (Vi), the third-largest telecom operator, is facing funding issues. The company's plan is to incur a capex of Rs 50,000-55,000 crore for improving networks. However, now it is facing funding issues as banks are not easily going to give it to them. This could result in potential market share loss, analysts said. Reliance Jio and Bharti Airtel have already bolstered their networks. The telcos have a wide 5G presence and a much stronger 4G presence than Vi. While Vi has invested plenty of money in FY25 to improve networks, it isn't enough.
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The funding delays are happening because of getting no help from the government in the AGR (adjusted gross revenue) dues payments. While there's a report that suggests government is working on a relief mechanism for Vi AGR dues payments, it remains to be seen when the telco will get that help and finally raise funds via debt.
Analysts have said that Vi's 20% gross revenue market share (RMS) in circles including Mumbai, Kerala, Kolkata, Maharasthra, and UP-West could lessen due to funding delays. It is worth noting that over 50% of the total revenues of the telco comes from these circles, as per TRAI (Telecom Regulatory Authority of India) data.
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Any delays in funding would mean that Vi won't be able to improve network in these areas. That could result in revenue market share (RMS) loss for the telco the coming quarters.
According to an ET report, HSBC Global Research, in a note said, "Any delay to Vi’s network strengthening (4G and 5G rollouts) in these seven circles could pose a downside risk for the telco’s market share. It is likely that Airtel and Jio would increase their capital investment in these seven circles to strengthen network capacity and quality of service to gain market share."
