Vodafone Idea (Vi) isn't doing well, but it isn't going to go out of the market (if anyone was questioning that). While the company's performance has been worrisome, according to ICICI Securities, the position of Vi is still better than the companies that went bankrupt when Jio came in. But the biggest thing that's holding back the company right now is the equity conversion process that the government has to do. The Department of Telecommunications (DoT) has not converted the interest dues of Vi into equity for itself. Until that happens, investors even remotely interested in getting a stake in the telco would be worried.
But now, according to a statement from Akshaya Moondra, CEO of Vodafone Idea, during the investors' call on Friday, the government hasn't had any communication with the telco about the conversion of dues into equity since April now. As per Moondra, this should happen soon. But since there's no word from the Department of Telecommunications (DoT) formally, it would be hard to determine when it would actually happen. This affects the telco in being able to raise funds through external investors.
Govt Wants to See 5G Rollout Plans of Vi and also the Telco Needs to Get Investors
According to a Financial Express report, the government wants to see Vodafone Idea's 5G rollout plans before it goes ahead with the equity conversion. In addition, the govt also wants the telco to get some investors on board. The telco is in a tough spot now. The investors won't come until the time the government takes a stake, and things become more clear as to how involved the government would be, while the government won't come until the investors will come, and there's a 5G rollout plan from Vi.
Moondra had previously said that Vi is in talks for raising funds, and until that happens, it can't give a strong word on how the 5G rollout would look like, which is fair. Vi clarified that there's no required minimum stock value for the government to convert the dues into equity. Currently, things look to be getting harder for Vi.
A recent Livemint report suggested that the government wanted the promoters Birla Group and Vodafone UK to infuse more capital into the company. But that seems like a long shot as of now because the telco has shown no signs of improvement. The ARPU (average revenue per user) has gone up, but the subscriber churn rate is alarmingly high.
Much recently, in order to boost its postpaid business, Vodafone Idea announced the Vi Max plans. Learn more about them by watching the video above.
