The survival of Vodafone Idea is slowly on the verge of the cliff because of heave financial liabilities and losing customer base. As per various reports by analysts, Vodafone Idea is staring at a slow death if it fails to acquire around Rs 26,000 crore to Rs 37,000 crore from fundings. The raised amount will be used to clear AGR dues, payment obligations and more. Vodafone Idea reported the lowest quarterly revenue in more than two years. The telco’s April-June quarter losses accounted for Rs 7,312.9 crore from Rs 6,985.1 crore. The quarterly revenue fell 4.73% sequentially to Rs 9,152.3 crores, and ARPU fell to Rs 104 from Rs 107.
Vodafone Idea Needs Funding Within Six Months
To get away from the clutches of slow death and retain in the Indian telecom space, Vodafone Idea needs around $3.5-5 billion of funding within six months. As per an ET Telecom report, the telco will be able to pump nearly $1.5-2 billion annually towards network capex if the funding plans are successfully executed. Nitin Soni, Senior Director at Global Ratings Agency Fitch, marked that Vodafone Idea’s Rs 940 crore network capex in the June quarter will translate to nearly Rs 3,760 crore annually, which will be even less for managing the telco’s pan-India network. On the other side, rivals Reliance Jio and Bharti Airtel are nearly investing over $3 billion in network capex annually.
Vodafone Idea has Lost Nearly 12.3 Million Customers in April-June
The user base of Vodafone Idea currently accounts for 255.4 million subscribers. The telco nearly lost 12.3 million subscribers in the April-June period. Reliance Jio and Bharti Airtel reported 441 million and 321.23 million users, respectively. The telcos reported ARPUs of Rs 138.4 and Rs 146, respectively, in the June quarter.
An unknown senior Analyst marked that bankruptcy seems to be unavoidable for Vodafone Idea if the government will not take a quick call on the survival packages for the telco. Vodafone Idea has to pay Rs 58,254 crore towards AGR dues, out of which it has only paid Rs 7,854 crores. The government is reportedly working on a relief package to aid the financially distressed telco. It is expected that the relief package could include a reduction of bank guarantees, reduces license fees, SUC and more.