Vodafone Idea’s Future is Still Not in the Green Despite Govt Equity

Vodafone Idea Limited (VIL) is focusing hard on improving/upgrading the fundamental pillar of its business – networks. The telco has been struggling for some time because of not being able to provide equal quality coverage as Airtel and Jio to consumers, especially when it came to 4G and 5G. This took Vi’s business in a downward spiral because the telco’s finances came under the hit as the customers started porting out of the networks.

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While Vi could raise money and then invest into the networks for better experience for the customers, it simply couldn’t. Vi found it extremely hard to raise funds because the telco’s debt mountain grew extremely fast. The government’s fight for the AGR (adjusted gross revenue) dues pushed Vi’s debt levels beyond Rs 2 lakh crore. At such a juncture, where the telco was losing revenues and customers and the services are so cheap, investors weren’t willing to lend a helping hand to Vi. In fact, Vodafone UK Plc, a promoter of Vi decided to write down the value of the telco as zero.

Read More – Vodafone Idea the Only Telco to Lose Active Users in Jan 2025

Govt Steps in to Reduce Debt

Vodafone Idea got major help from the government after the telco’s financial situation worsened. The government decided that it would reduce the telco’s debt and instead take equity against it. This was important for the government to do because it meant no more threats of a duopoly market in India. If Vi goes out of business, that won’t be right for the market in terms of competition.