Vodafone Idea (Vi), the only struggling private telecom player in India has reportedly broken ties with 25000 retail partners across India. The move is for reducing costs, said an ET Telecom report. More specifically, Vi has let go of partners who were a part of multi-brand retailer segment. These partners offered services of every telco to the customers. As per the report from ET, Vi around 4 to 5 lakh retail touch points across India. Most of these are actually multi-brand retailers.
Vi has targetted the retailers who were giving it negative returns. The move will help Vi in reducing overall costs and inch towards better revenue margins. Reliance Jio and Bharti Airtel have eaten up millions of Vi subscriber over the last few years. At a time like this, Vi needs to reduce costs and also look to add new subscribers, which hasn't happened for a long-time now.
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Currently, Vi is in need of tariff hikes. Without hiking the tariffs, the telco won't be able to improve its average revneue per user (ARPU) figure. At Q4 FY23, Vi's ARPU was Rs 135, the lowest in the industry amongst the private telecom players. Vi would come under a severe need of cash once FY26 arrives and the moratorium period ends.
At the same time, the telco also has to figure out ways to raise as much funds as possible. Recently, there was a report that said that Vi is going to propose a significant equity infusion of Rs 14000 crore. Out of the said amount, half is said to be pitched by the promoters - Vodafone UK and the Aditya Birla Group.
But ABG and Vodafone UK are only going to invest Rs 2000 crore as they have already infused over Rs 5000 crore in the recent past. As of now, the Indian government is the largest stakeholder in Vi.
