Vodafone Idea in Need of a Miracle to Turn Things Around

Aditya Birla Group (ABG), one of Vi's promoters, has been trying to get funding from external investors for the telco. But no developments have come in that regard so far. Without fundraising, Vi is not in a position to start deploying 5G at scale. So in the next few months, for Vi to make a comeback, a lot will depend on whether the telco is able to raise funds or not.

Highlights

  • Vodafone Idea (Vi),. one of India's leading telecommunications companies, has been struggling in recent years to keep up with its competitors
  • The company's mounting debts, coupled with a declining customer base, have left it in a precarious position.
  • Not a lot has gone right for the telco in the last few years.

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Vodafone Idea

Vodafone Idea (Vi),. one of India's leading telecommunications companies, has been struggling in recent years to keep up with its competitors. The company's mounting debts, coupled with a declining customer base, have left it in a precarious position. Not a lot has gone right for the telco in the last few years. Vi is trying to stay afloat by announcing partnerships with other tech firms to bring innovative solutions and entertainment to its customers at scale. Despite that, the telco has been losing subscribers for 22 consecutive months now. While it is still a very large company, Vi's active subscriber base is very close to going below the 200 million mark.




Read More - Vodafone Idea Shares Slip Below Rs 6 on Tuesday Morning

That would be a big blow to the company. In Jan 2023, Vi had approx 209 million active users, said a TRAI (Telecom Regulatory Authority of India) report. In Feb, the government of India took a big decision to go ahead with the conversion of interest dues of Vi to equity for itself. Vi's largest stakeholder is now the Indian government. But the telco still remains a private company, and the government has said that it won't be interfering with the company's operations.

Aditya Birla Group (ABG), one of Vi's promoters, has been trying to get funding from external investors for the telco. But no developments have come in that regard so far. Without fundraising, Vi is not in a position to start deploying 5G at scale. So in the next few months, for Vi to make a comeback, a lot will depend on whether the telco is able to raise funds or not.

Vi definitely needs a miracle to come through in the short term to build a sustainable business in the long run. Every quarter that goes by, the telco's subscriber base declines and losses expand. It would also face a lot of competition from Airtel and Jio in the postpaid segment as well. While Vi announced Vi Max postpaid plans late in 2022, to counter that, Airtel and Jio brought new lower-priced postpaid plans in early 2023. These new plans are backed by the 5G networks of Jio and Airtel. Vi postpaid users have to continue with the 4G experience.

On the fixed-line broadband side, Vi's business is showing negligible growth. For the unaware, Vi runs its home broadband business under the brand You Broadband.

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