Vodafone Idea to Get Good, Fresh Investment Believes Telecom Minister

Ashwini Vaishnaw, the telecom minister of India, said during a telecom investors roundtable in Mumbai that Vodafone Idea Limited (VIL) will get good and fresh investment. Vaishnaw said that Vi's participation in the 5G spectrum auction is a testament to the fact that the company has come out of the difficult times and should remain a viable entity going forward. 

Highlights

  • The telecom sector has been helped by the Indian government a lot in the last year.
  • Ashwini Vaishnaw, the telecom minister of India, said during a telecom investors roundtable in Mumbai that Vodafone Idea Limited (VIL) will get good and fresh investment.
  • While the concerns over Vi's business plans still remain, things could improve dramatically if Vi can secure big external funding.

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Vodafone Idea

The telecom sector has been helped by the Indian government a lot in the last year. It all started with the relief measures announced in September 2021. Vodafone Idea (Vi), the struggling Indian private telecom company, was almost saved by the government with the relief measures or else the telco would have found it very hard to keep meeting the statutory dues payments at regular intervals. But since the government's goal was to help with the liquidity issues of the sector, a company such as Vodafone Idea benefitted a lot. Not that Jio and Airtel didn't benefit from the relief measures, but for Vi, it was literally a lifeline.

Ashwini Vaishnaw, the telecom minister of India, said during a telecom investors roundtable in Mumbai that Vodafone Idea Limited (VIL) will get good and fresh investment. Vaishnaw said that Vi's participation in the 5G spectrum auction is a testament to the fact that the company has come out of the difficult times and should remain a viable entity going forward.

Vodafone Idea Needs Money Fast, But Fundraising is Being Delayed Because of the Govt

It is actually quite true. While the concerns over Vi's business plans still remain, things could improve dramatically if Vi can secure big external funding. The telco's board has been trying to raise huge chunks of money through external investors for a long-time. At the moment, Vi isn't able to bring in any major investment because the government equity conversion process is still pending. However, if the government takes a lot of time to do it, the telco's growth plans might falter a little.

Vi CEO Ravinder Takkar had said that the telco plans to raise around Rs 20,000 crore soon. But there were issues around the fundraising because the DoT (Department of Telecommunications) has not finished the government equity conversion. Vi had opted for converting its accrued interest dues into equity for the government.

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