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Just ahead of its mega <keyword id="20008249" type="General" weightage="20" keywordseo="FPO" source="keywords">FPO</keyword> opening to <keyword id="21332860" type="General" weightage="20" keywordseo="public-investors" source="keywords">public investors</keyword>, <keyword id="19899016" type="General" weightage="20" keywordseo="Vodafone-Idea" source="keywords">Vodafone Idea</keyword> (<keyword id="20062540" type="General" weightage="20" keywordseo="vil" source="keywords">VIL</keyword>) has announced closure of its anchor book allocation, raising about Rs 5,400 crore from marquee global as well as domestic investors, according to a statutory filing by the <keyword id="20132985" type="General" weightage="20" keywordseo="telco" source="keywords">telco</keyword>. This could be the third-largest anchor book after One 97 Communications and Life Insurance Corporation (LIC). One 97 Communications and LIC had raised Rs 8,235 crore and Rs 5,627 crore in the anchor round, respectively. In a notification to the exchanges on Wednesday, VIL said it has allotted 490.9 crore shares to 74 funds at Rs 11 apiece, which is also the upper end of the price band. This translated into a transaction size to Rs 5,400 crore. Of the total allocation to <keyword id="21330641" type="General" weightage="20" keywordseo="anchor-investors" source="keywords">anchor investors</keyword>, 79.52 crore stocks, or 16.2 per cent of the total, were allocated to five domestic mutual fund through a total of 11 schemes. Those who were allotted shares include GQG Partners Emerging Markets Equity Fund, Fidelity, UBS Fund Management, Abu Dhabi Investment Authority, Australian Super, Troo Capital, Morgan Stanley, Citigroup Global Markets Mauritius, and Jupiter Fund Management. Additionally, domestic investors, including Motilal Oswal Mutual Fund, HDFC Mutual Fund, SBI General Insurance and Quant Mutual Fund, were allocated shares in the anchor round. The Rs 18,000-crore FPO of Vodafone Idea will open for public subscription on April 18 and conclude on April 22, marking the biggest FPO in the country. The price band has been set at Rs 10-11 per share. Prior to this, the largest FPO in the Indian market was a Rs 15,000 crore share-sale by YES Bank in 2020. The fundraise would give the ailing telco the firepower to improve its positioning in the Indian telecom market, where it currently trails larger rivals such as Reliance Jio and Bharti Airtel, by a wide margin. The funds will also help VIL shore up finances for the much-delayed <keyword id="20366727" type="General" weightage="20" keywordseo="5G-rollout" source="keywords">5G rollout</keyword> and strengthening 4G services, and payment of vendor dues. On April 6, the VIL Board approved raising Rs 2,075 crore from promoter Aditya Birla Group and increasing its authorised share capital to Rs 1 lakh crore. Earlier this year, Vodafone Idea had outlined plans to raise Rs 45,000 crore through a mix of equity and debt as it looked to match services offered by rivals Reliance Jio and Bharti Airtel and arrest an alarming and prolonged subscriber churn. VIL has also been fighting a desperate battle for survival, saddled with debt of Rs 2.1 lakh crore and quarterly losses. According to Trai data, Vodafone Idea continued to bleed on the subscriber front. VIL lost 15.2 lakh wireless subscribers, plunging its mobile subscriber base to 22.15 crore in January, in sharp contrast to subscriber gains by Jio and Airtel.

Ahead of FPO, Vodafone Idea garners Rs 5,400 cr from anchor investors

<ul><li>Vodafone Idea has reportedly reached out to the Department of Telecom to release bank guarantees worth ₹15,000 crore.</li><li>The bank guarantees were given to the government with respect to the adjusted gross revenue (AGR) and spectrum dues worth ₹50,339 crore.</li><li>With the telco opting for the four-year deferment of AGR dues, it now believes there’s no need for the DoT to hold on to those bank guarantees.</li><li>This is crucial for the telco as its board meets on March 3 to discuss fundraising options.</li></ul>Vodafone Idea has reportedly asked the Department of Telecom to release ₹15,000 crore in bank guarantees as the telco’s board of directors meets on March 3 to discuss fundraising plans. According to a report by <a href="https://telecom.economictimes.indiatimes.com/news/vodafone-idea-urges-dot-to-release-rs-15000-crore-bank-guarantees/89935218">ET Telecom</a>, Vodafone Idea’s argument is now that the adjusted gross revenue (AGR) and spectrum dues <a href="https://www.businessinsider.in/business/telecom/news/telecom-relief-package-airtel-vodafone-idea-get-four-year-moratorium-on-agr-dues/articleshow/86227218.cms">have been deferred</a> by four years, and the government has the option to convert this into equity, there is no need to hold up the bank guarantees for the same dues. Shares of Vodafone Idea were up by 2% as of 9:30 a.m., on Wednesday. <div type="image" title="Vodafone Idea 01_01_22 to 02_03_22." msid="89937111" hostid="261" caption="&amp;lt;p&amp;gt;Vodafone Idea&amp;#39;s share performance in 2022 so far&amp;lt;/p&amp;gt;"></div> At the moment, the Department of Telecom reportedly holds ₹15,000 crore in bank guarantees, against Vodafone Idea’s AGR and spectrum dues worth ₹50,339 crore. “Vodafone [Idea] has expressed the need to release bank guarantees since the AGR dues themselves have been deferred by four years,” the ET report said, quoting an unnamed government official. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[]]></cdata></div> Apart from this, the telco also wants the government to freeze the date of calculation of AGR dues on the date of the Supreme Court’s judgement in the matter. Business Insider has written to Vodafone Idea for a statement in this regard. We will update the story if and when we receive a response. <cmsannotation type="cmsannotation" annotationid="Why is this important for Vodafone Idea?" comment="subhead" text="Why is this important for Vodafone Idea?">Why is this important for Vodafone Idea?</cmsannotation> The request to release ₹15,000 crore bank guarantees will free up some pressure on Vodafone Idea’s balance sheet, which is racing to get the crucial fundraising from its potential investors. <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-could-finally-get-the-much-needed-capital-infusion-from-its-british-parent-vodafone-group-plc/articleshow/89774140.cms">Earlier reports</a> had suggested that the company’s British parent – Vodafone Group Plc., – is paring its stake in Indus Towers, to infuse funds in Vodafone Idea. While Vodafone has sold 7.1% stake in the tower company, there have been no other developments with regards to it infusing funds in Vodafone Idea, so far. Now, Vodafone Idea’s board of directors is scheduled to meet tomorrow, March 3, to discuss fundraising options on the table. SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/telecom-relief-package-airtel-vodafone-idea-get-four-year-moratorium-on-agr-dues/articleshow/86227218.cms">Indian government dials M for moratorium – Airtel, Vodafone Idea get a four-year relief on AGR dues</a> <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-could-finally-get-the-much-needed-capital-infusion-from-its-british-parent-vodafone-group-plc/articleshow/89774140.cms">Vodafone Idea’s British parent could infuse capital in the telco after refusing to do so for several months</a> <a href="https://www.businessinsider.in/business/telecom/news/mukesh-ambani-and-sunil-mittal-are-fast-catching-up-while-elon-musk-struggles-for-satellite-broadband-licence/articleshow/89561185.cms">India’s richest billionaires are fast catching up while Elon Musk struggles for satellite broadband licence</a>

Vodafone Idea reportedly wants the government to release ₹15,000 crore bank guarantees ahead of its fundraising plan

India's largest telecom operator <keyword id="6354504" type="General" weightage="80" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword> added 30.5 lakh mobile subscribers in March, accelerating its momentum of February, while <keyword id="1553175" type="General" weightage="100" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword> lost 12.12 lakh wireless users during the month, according to data released by telecom regulator <keyword id="6356988" type="General" weightage="20" keywordseo="TRAI" source="Orion">TRAI</keyword>. Sunil Mittal-led telecom company <keyword id="6354287" type="General" weightage="80" keywordseo="bharti-airtel" source="Orion">Bharti Airtel</keyword> onboarded 10.37 lakh mobile subscribers in March, raising its subscriber base to 37.09 crores in March against 36.98 crores in February. Reliance Jio added 30.5 lakh subscribers in March, as its subscriber count exceeded 43 crore, compared to 42.71 crore in February. It is pertinent to mention that in February too, Reliance Jio had added the maximum number of mobile subscribers (at about 10 lakh) among telcos, while <keyword id="15491" type="General" weightage="80" keywordseo="airtel" source="Orion">Airtel</keyword> had gained 9.82 lakh mobile users during February. A look at March data released by TRAI showed that Vodafone Idea -- which trails Reliance Jio and Bharti Airtel in the mobile market subscriber tally -- lost 12.12 lakh mobile users in March. Vodafone Idea's mobile subscriber base shrunk to 23.67 crore in March, from 23.79 crore in the previous month. Overall, the broadband subscribers' tally rose by 0.86 per cent month-on-month. "... the total broadband subscribers increased from 839.33 million at the end of February-23 to 846.57 million at the end of March-23 with a monthly growth rate of 0.86 per cent," a Telecom Regulatory Authority of India (TRAI) release said. Top five service providers constituted 98.37 per cent market share of the total broadband subscribers at the end of March 2023, including Reliance Jio Infocomm Ltd (43.85 crore), Bharti Airtel (24.19 crore), Vodafone Idea (12.48 crore). Overall, the number of total telephone subscribers in India increased to 1,172.84 million (117.2 crore) at the end of March 2023, showing a monthly growth rate of 0.21 per cent. "Urban telephone subscription increased from 652.16 million at the end of February-23 to 653.71 million at the end of March-23 and the rural subscription also increased from 517.77 million to 518.63 million during the same period. "The monthly growth rates of urban and rural telephone subscription were 0.24 per cent and 0.17 per cent respectively during the month of March-23," TRAI said. Overall teledensity in India increased to 84.51 per cent at the end of March 2023. "The Urban Tele-density increased from 133.70 per cent at the end of February-23 to 133.81 per cent at the end of March-23 and rural tele-density also increased from 57.63 per cent to 57.71 per cent during the same period," it said. SEE ALSO: <a href="https://www.businessinsider.in/thelife/personalities/news/gautam-adani-in-striking-distance-of-entering-the-top-20-richest-club-once-again/articleshow/100437220.cms">Gautam Adani in striking distance of entering the top 20 richest club once again</a> <a href="https://www.businessinsider.in/finance/news/bank-deposits-gold-sales-real-estate-to-get-a-boost-with-2000-note-withdrawal-kotak/articleshow/100429411.cms">Not just bank deposits, gold sales &amp; real estate to get a boost from ₹2,000 note withdrawal</a> <a href="https://www.businessinsider.in/business/startups/news/angel-tax-changes-to-cheer-investors-aid-late-stage-funding-say-experts/articleshow/100422848.cms">Angel tax changes to cheer investors, aid late-stage funding say experts</a>

Jio adds 3 million subscribers in March, Vodafone Idea loses 1.2 million

<ul><li>Airtel has six times more cash than <keyword id="15492" type="CITY" weightage="20" keywordseo="Vodafone">Vodafone</keyword> Idea.</li><li>Both Reliance Jio and Airtel have nearly 1.5 times more subscribers than Vodafone Idea</li><li>Vodafone Idea has more spectrum compared to Jio but still gets the least amount of traffic.</li><li>The only thing it has more than others is debt. At the end of March, 2021, Vodafone Idea’s debt stood at ₹1.75 lakh crore, while Airtel’s debt stood at ₹1.53 lakh crore.</li></ul>Vodafone Idea’s situation continues to worsen, in terms of market share, revenue as well as the value of the company. On the other hand, its rivals, Bharti Airtel and Reliance Jio (owned by the country’s richest man Mukesh Ambani) continue to get stronger, often at the cost of Vodafone Idea. People are questioning the possibility of its survival. Even if it does get bailed out one way or another, the company will have a lot of catching up to do with its larger peers like Sunil Mittal’s Airtel and Ambani’s Reliance Jio. The loss of competitive muscle will only get worse the longer it remains in the current limbo. No wonder <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-news-birla-offers-to-give-up-his-27-stake-in-vodafone-idea/articleshow/84969189.cms">its Indian promoter Kumar Mangalam Birla</a> wants to give up his stake in the company, and his British partner Vodafone is not willing to sink any more money into this joint venture in India. Birla has also resigned as the non-executive director and chairman of the board of Vodafone Idea, a request which has been accepted by the company. Not surprisingly, the stock took a tumble. <div type="image" title="Vodafone Idea share price" msid="85035864" hostid="261" caption="&amp;lt;p&amp;gt;Vodafone Idea share price&amp;lt;/p&amp;gt;"></div> <cmsannotation type="cmsannotation" annotationid="Airtel has six times more cash than Vodafone Idea" comment="subhead" text="Airtel has six times more cash than Vodafone Idea">Airtel has six times more cash than Vodafone Idea</cmsannotation> As of March 31, 2021, Vodafone Idea had ₹2,216 crore in the form of cash and bank balances. This is six times lower than Airtel’s reported cash and bank balance in the same period. <cmsannotation type="cmsannotation" annotationid="The only thing that Vodafone has more of, than Airtel and Jio, is debt" comment="subhead" text="The only thing that Vodafone has more of, than Airtel and Jio, is debt">The only thing that Vodafone has more of, than Airtel and Jio, is debt</cmsannotation> The cash crunch will only get worse when it has to pay up the dues <a href="https://www.businessinsider.in/business/telecom/news/its-the-day-airtel-and-vodafone-idea-have-been-waiting-for-heres-the-agr-case-timeline-of-26-years/articleshow/77845908.cms">ordered by the Supreme court</a>, amounting to ₹58,631 crore. Of this, ₹5,034 crore falls due in December 2021 – an amount that the telco doesn’t seem to be in a position to pay. In comparison, Airtel’s balance AGR liability stands at ₹25,976 crore, which means its current liability comes to ₹2,598 crore. <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-width: 0.5pt 0.5pt 1pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Company </td><td style="border-width: 0.5pt 0.5pt 1pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Total AGR demand (in crore) </td><td style="border-width: 0.5pt 0.5pt 1pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">AGR dues paid (in crore) </td><td style="border-width: 0.5pt 0.5pt 1pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Balance (in crore) </td></tr><tr><td style="border-width: 1pt 0.5pt 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Vodafone Idea </td><td style="border-width: 1pt 0.5pt 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">₹58,254 </td><td style="border-width: 1pt 0.5pt 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">₹7,854 </td><td style="border-width: 1pt 0.5pt 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">₹50,339 </td></tr><tr><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Airtel </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">₹43,980 </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">₹18,004 </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">₹25,976 </td></tr></tbody><tbody></tbody><tbody></tbody></table> At the end of March, 2021, Vodafone Idea’s debt stood at ₹1.75 lakh crore, while Airtel’s debt stood at ₹1.53 lakh crore. <cmsannotation type="cmsannotation" annotationid="Vodafone is losing both subscribers and revenue at a fast pace" comment="subhead" text="Vodafone is losing both subscribers and revenue at a fast pace">Vodafone is losing both subscribers and revenue at a fast pace</cmsannotation> <div type="image" title="Vodafone Idea, Airtel, Reliance Jio subscribers May 2021." msid="85035881" hostid="261" caption="&amp;lt;p&amp;gt;Vodafone Idea, Airtel and Reliance Jio subscribers.&amp;lt;/p&amp;gt;"></div> Since the beginning of 2020, Vodafone Idea has lost over 51 million subscribers. In the same period, Airtel and Reliance Jio have gained over 21 million and 62 million subscribers, respectively. To make matters worse, Vodafone is losing the relatively lucrative 4G subscribers, too – in May, for each 2G/3G subscriber it lost, three 4G subscribers ported out from the operator. <div type="image" title="Vodafone Idea, Airtel, Reliance Jio ARPU March, 2021." msid="85035904" hostid="261" caption="&amp;lt;p&amp;gt;Vodafone Idea, Airtel and Reliance Jio ARPU as of March, 2021.&amp;lt;/p&amp;gt;"></div> The average revenue that Vodafone Idea makes from each of its users is also under pressure. According to the company’s latest statements, the average revenue per user stood at ₹107 at the end of March, 2021, down from ₹121 three months prior. For comparison, Airtel’s ARPU in the same period was ₹145, while Jio stood at ₹138. The problem with lesser ARPU has become a vicious cycle in the case of Vodafone Idea. If it raises tariffs to improve its earnings, and others don’t, the company will lose more subscribers. If others follow VI in raising tariffs, they make more money, which can be later used to edge it out. The longer VI waits for others to make the first move, the more money it bleeds. <cmsannotation type="cmsannotation" annotationid="Vodafone has more spectrum compared to Jio but still gets the least amount of traffic" comment="subhead" text="Vodafone has more spectrum compared to Jio but still gets the least amount of traffic">Vodafone has more spectrum compared to Jio but still gets the least amount of traffic</cmsannotation> According to data from a UBS report dated July 29, here’s how much spectrum all the three telecom operators held at the end of March, 2021: <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-width: 0.5pt 0.5pt 1pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Company </td><td style="border-width: 0.5pt 0.5pt 1pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Spectrum holding </td></tr><tr><td style="border-width: 1pt 0.5pt 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Airtel </td><td style="border-width: 1pt 0.5pt 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">2,112 MHz </td></tr><tr><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Vodafone Idea </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">1,768 MHz </td></tr><tr><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Reliance Jio </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">1,752 MHz </td></tr></tbody><tbody></tbody></table> Source: UBS, as of March, 2021 Despite holding the second largest chunk of spectrum, Vodafone Idea’s inability to upgrade its users to 4G has hampered its potential – both in terms of the number of 4G subscribers as well as the amount of data it serves. <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-width: 0.5pt 0.5pt 1pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Company </td><td style="border-width: 0.5pt 0.5pt 1pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">4G subscribers (in million) </td><td style="border-width: 0.5pt 0.5pt 1pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Total data (in million GB) </td></tr><tr><td style="border-width: 1pt 0.5pt 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Reliance Jio </td><td style="border-width: 1pt 0.5pt 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">426.6 </td><td style="border-width: 1pt 0.5pt 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">16,700 </td></tr><tr><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Airtel </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">179.3 </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">9,207 </td></tr><tr><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Vodafone Idea </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">113.9 </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">4,856 </td></tr></tbody></table> Source: UBS, as of March, 2021 <cmsannotation type="cmsannotation" annotationid="The odds are stacked against Vodafone Idea" comment="subhead" text="The odds are stacked against Vodafone Idea">The odds are stacked against Vodafone Idea</cmsannotation> In a report dated July 29, Goldman Sachs maintained its ‘Sell’ rating for Vodafone Idea, with the target price set at ₹3 per share, suggesting that there is a further likelihood of a 60% decline in the telco’s share price. “It is well-flagged that Vodafone Idea has large repayments due starting Dec ‘21, and its balance sheet is stressed,” the report adds. “If Vodafone Idea is unable to repair its balance sheet quickly, we see an accelerated erosion in the company’s market share,” the report explains. On the other hand, analysts are bullish on Airtel. <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-width: 0.5pt 0.5pt 1pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Brokerage </td><td style="border-width: 0.5pt 0.5pt 1pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Target price </td><td style="border-width: 0.5pt 0.5pt 1pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Upside </td></tr><tr><td style="border-width: 1pt 0.5pt 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">JP Morgan </td><td style="border-width: 1pt 0.5pt 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">₹790 </td><td style="border-width: 1pt 0.5pt 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">38% </td></tr><tr><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Credit Suisse </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">₹750 </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">31% </td></tr><tr><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">CLSA </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">₹730 </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; background-color: rgb(217, 217, 217); padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">27% </td></tr><tr><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">Goldman Sachs </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">₹675 </td><td style="border-width: 0.5pt; border-style: solid; border-color: rgb(0, 0, 0); vertical-align: bottom; padding: 0pt 5.75pt; overflow: hidden; overflow-wrap: break-word;">17% </td></tr></tbody></table> Note: Upside compared to Airtel’s share price of ₹574, on August 4, 2021 SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/as-vodafone-idea-shares-dive-10-and-more-heres-a-look-at-what-analysts-had-to-say-about-it-prospect-in-recent-weeks/articleshow/84999673.cms">As Vodafone Idea shares dive 10% and more, here's a look at what analysts had to say about it prospect in recent weeks</a> <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-and-airtel-shares-fall-as-sc-rejects-agr-dues-re-computation-appeal/articleshow/84668288.cms">Vodafone Idea sinks nearly 10% and Airtel tumbles a bit after India’s Supreme Court denies a discount on past dues</a> <a href="https://www.businessinsider.in/business/telecom/news/its-the-day-airtel-and-vodafone-idea-have-been-waiting-for-heres-the-agr-case-timeline-of-26-years/articleshow/77845908.cms">Airtel and Vodafone Idea get 10 years to repay AGR dues – here’s a timeline of the case</a>

The enormous gap between Vodafone Idea on one hand, Airtel and Jio on the other

<ul><li><keyword id="1553175" type="General" weightage="100" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword> could be close to clinching an investment of ₹20,000 crore – something that it has been looking for since 2020.</li><li>This probable fundraise comes less than two months after its promoter, Vodafone Plc. pumped in ₹4,500 crore via its equity arms.</li><li>Amazon, one of the reported investors, has been exploring an entry in the Indian telecom sector since 2020 by picking up a stake in Vodafone Idea.</li></ul>Shares of Vodafone Idea have been gaining for the last two days - which is a rare occurrence. In fact, its market cap swelled by ₹2,000 crore after news of its fundraising plans, especially from a well capitalized global player like Amazon have started doing the rounds. For nearly three years now, Vodafone Idea has been <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-will-raise-up-to-25000-crore-by-selling-shares-and-taking-loans/articleshow/77933604.cms">trying to raise ₹25,000 crore</a> to tide over its AGR troubles as well as make network and spectrum investments into a market which now shows signs of optimism with low competitive intensity. As per media reports, it might be close to clinching a deal with global tech major Amazon, to raise as much as ₹20,000 crore. <div type="image" title="Vodafone Idea 01_01_22 to 31_05_22." msid="91906362" hostid="261" caption="&amp;lt;p&amp;gt;Vodafone Idea share price in 2022&amp;lt;/p&amp;gt;"></div> According to a report by the <a href="https://economictimes.indiatimes.com/industry/telecom/telecom-news/close-to-tying-up-rs-20000-crore-to-fight-rivals-vodafone-idea-md-ravinder-takkar/articleshow/91731538.cms">Economic Times</a>, Vodafone Idea is expected to raise ₹10,000 crore via an equity stake sale, and ₹10,000 crore via debt. The latter would send its total debt over ₹2 lakh crore, but the company’s managing director Ravinder Takkar is not flinching, saying that the government owns nearly 90% of this debt. Earlier, the Takkar-led telco had said it <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-will-raise-up-to-25000-crore-by-selling-shares-and-taking-loans/articleshow/77933604.cms">needs ₹25,000 crore</a> to turn around its fortunes and remain competitive – of this, it has already <a href="https://www.businessinsider.in/business/news/vodafone-raises-stake-to-47-61-in-vodafone-idea-through-subsidiary-prime-metals/articleshow/90639253.cms#:~:text=Vodafone%20raises%20stake%20to%2047.61%25%20in%20Vodafone%20Idea%20through%20subsidiary%20Prime%20Metals,-Advertisement&amp;text=British%20telecom%20major%20Vodafone%20has,regulatory%20filing%20said%20on%20Monday.">raised ₹4,500 crore</a> in April. If they raise the said amount too, then their war chest will be almost full – and bring it back into the market with full force. <cmsannotation type="cmsannotation" annotationid="Vodafone Idea continues to lose millions of subscribers every month" comment="subhead" text="Vodafone Idea continues to lose millions of subscribers every month">Vodafone Idea continues to lose millions of subscribers every month</cmsannotation> Vodafone Idea’s bid to turn around its business and stabilize its operations will take a lot of work. It has been losing millions of subscribers every month. In the first three months of 2022, it lost 4.7 million subscribers. Throughout the fiscal year 2021-22, the telco lost nearly 23 million subscribers – an average of 1.9 million subscriber loss every month. <div type="image" title="Airtel Jio Vodafone Idea subscriber chart 2021-22." msid="91906564" hostid="261" caption="&amp;lt;p&amp;gt;Net subscriber additions in 2021-22&amp;lt;/p&amp;gt;"></div> In the same period, its rival Airtel added 8 million subscribers, although Jio lost nearly 19 million subscribers, too. However, Jio’s losses are on account of the telco wiping its slate clean of subscribers who are inactive and not paying. While it’s not certain who the investor is, a report by The Ken suggests it could be Amazon. The e-commerce giant has so far been left behind by its rivals Google, Facebook and Microsoft, who have all either partnered with Airtel and Reliance Jio, or have invested billions of dollars in these companies. <div type="javascript" title="Custom" contenttype=""><cdata><![CDATA[]]></cdata></div> Vodafone Idea, on the other hand, is yet to see a single dollar from them. Amazon was <a href="https://economictimes.indiatimes.com/industry/telecom/telecom-news/amazon-verizon-may-invest-over-4-billion-in-indias-vodafone-idea-report/articleshow/77904230.cms">said</a> to be exploring a joint investment of $4 billion with US carrier Verizon in Vodafone Idea back in 2020, but that did not pan out. SEE ALSO: <a href="https://www.businessinsider.in/thelife/personalities/news/gautam-adani-a-story-on-how-to-generate-wealth-via-hope-fomo-and-of-course-debt/articleshow/91829090.cms">Understanding Gautam Adani’s rise: a story on how to generate wealth via hope, equity and of course debt</a> <a href="https://www.businessinsider.in/stock-market/news/these-four-drone-company-stocks-gave-record-breaking-returns-in-one-year/articleshow/91892935.cms">These four drone company stocks gave record breaking returns in one year</a> <a href="https://www.businessinsider.in/cryptocurrency/news/indian-government-looking-for-ways-to-tax-nfts-as-per-a-new-report/articleshow/91882530.cms">After cryptos, the taxman could come for your NFTs says a new report</a>

Vodafone Idea will have a solid ‘turnaround’ war chest if it clinches the Amazon deal

<ul><li><keyword id="1553175" type="General" weightage="100" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword> can heave a sigh of relief after finally succeeding in raising funds.</li><li>The telco has raised ₹4,500 crore from its promoters, and has an option to raise an additional ₹10,000 crore later.</li><li>This comes after the Vodafone Group sold a 7.1% stake in Indus Towers, raising over ₹4,300 crore in the process.</li></ul>Vodafone Idea has finally kickstarted its long-awaited fundraising plan, with the company’s promoters – Vodafone Group Plc., and Aditya Birla Group, pitching in with ₹4,500 crore. Interestingly enough, Vodafone Group had earlier <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-could-finally-get-the-much-needed-capital-infusion-from-its-british-parent-vodafone-group-plc/articleshow/89774140.cms">refused to infuse funds</a> in the telco for several months. Ahead of the fundraising announcement on March 3, the company’s shares ended the day up by over 6%. This should provide some respite to the company’s investors, who have seen their investment erode by a third since the beginning of 2022. However, Vodafone Idea’s shares were down by 3.6% as of 9:40 a.m., today, March 4, as the Russia-Ukraine conflict continues to worsen. <div type="image" title="Vodafone Idea 01_01_22 to 04_03_22." msid="89983726" hostid="261" caption="&amp;lt;p&amp;gt;Vodafone Idea share price in 2022&amp;lt;/p&amp;gt;"></div> The company’s board has room to raise an additional ₹10,000 crore via equity and debt instruments, including depository receipts and foreign currency convertible bonds. This comes after the Vodafone Group <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-could-finally-get-the-much-needed-capital-infusion-from-its-british-parent-vodafone-group-plc/articleshow/89774140.cms">sold</a> a total of 7.1% stake in tower company Indus Towers – it raised ₹1,442 crore via a 2.4% stake sale via a block deal, and another ₹2,900 crore by selling the balance 4.7% stake to Bharti Airtel, a rival of Vodafone Idea. Out of the ₹4,500 crore, 75% of the funds will come in from the Vodafone Group, with the Aditya Birla Group contributing the remaining 25%. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[]]></cdata></div> <cmsannotation type="cmsannotation" annotationid="What does it mean for users?" comment="subhead" text="What does it mean for users?">What does it mean for users?</cmsannotation> The fundraise should help Vodafone Idea work towards its plans to raise capital expenditure to the tune of $2 billion (approx. ₹15,000 crore). This will primarily be aimed at boosting the telco’s network capacities, improving the technology backend and participating in the upcoming 5G spectrum auction, expected to happen sometime in the first quarter of 2022. <cmsannotation type="cmsannotation" annotationid="Fundraise comes soon after Vodafone Idea opted for AGR dues moratorium" comment="subhead" text="Fundraise comes soon after Vodafone Idea opted for AGR dues moratorium">Fundraise comes soon after Vodafone Idea opted for AGR dues moratorium</cmsannotation> The long-awaited fundraise comes soon after the ailing telecom operator opted for the Indian government’s adjusted gross revenue (AGR) dues moratorium, allowing it to obtain a much-needed cash flow relief. According to the AGR and spectrum dues case in the Supreme Court, the total demand stood at ₹58,254 crore of which Vodafone Idea has already repaid ₹7,854 crore. Its current outstanding is ₹50,339 crore. More recently, <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-reportedly-wants-the-government-to-release-15000-crore-bank-guarantees/articleshow/89937099.cms">the telco also applied</a> to the Department of Telecommunications (DoT) to release its bank guarantees worth ₹15,000 crore, and also freeze the calculation of interest on its AGR dues on the date of its application for moratorium. SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-reportedly-wants-the-government-to-release-15000-crore-bank-guarantees/articleshow/89937099.cms">Vodafone Idea reportedly wants the government to release ₹15,000 crore bank guarantees ahead of its fundraising plan</a> <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-could-finally-get-the-much-needed-capital-infusion-from-its-british-parent-vodafone-group-plc/articleshow/89774140.cms">Vodafone Idea’s British parent could infuse capital in the telco after refusing to do so for several months</a> <a href="https://www.businessinsider.in/business/telecom/news/mukesh-ambanis-reliance-jio-loses-13-million-subscribers-its-second-largest-fall-so-far/articleshow/89644193.cms">Reliance Jio gets its second big jolt on its path to 500 million subscribers</a>

Even a big fundraise is not helping Vodafone investors as Russia-Ukraine conflict takes the wind out of global markets

<ul><li>Vodafone-Idea’s shares are up 5% after the company completed its stake sale in Indus Towers for ₹3,760 crore.</li><li>There are also reports that a consortium led by Oaktree Capital has offered around $2 billion of capital to invest in the Vodafone Group’s Indian arm. </li><li>Analysts believe that fresh investments and price hikes to improve average return per users (ARPU) are the only things that can help its survival.</li></ul>Vodafone-Idea has been bleeding subscribers for years and now even its postpaid customers are under threat of being wooed away by <keyword id="6354504" type="DEFINITION" weightage="20" keywordseo="reliance-jio">Reliance Jio</keyword>. According to analysts, the only way out for the company is with the fresh infusion of funds — and that’s what the company is doing. Vodafone-Idea shares were up nearly 5% today morning after the telecom player completed the sale of its stake in Indus Towers for ₹3,760.1 crore in cash. There are also <a href="https://www.bloombergquint.com/business/oaktree-varde-said-to-offer-2-billion-funding-to-vodafone-idea">reports</a> that a consortium backed by Oaktree Capital has offered Vodafone’s Indian arm $2 billion — approximately ₹14,800 crore — in funding. <div type="image" title="Copy of sbi share price (1)" msid="79316655" hostid="261" caption="&amp;lt;p&amp;gt;Vodafone-Idea share price since September 7 when it was rebranded as Vi!&amp;lt;/p&amp;gt;"></div> Both of these moves tie in with <keyword id="1553175" type="COMPANY" weightage="20" keywordseo="Vodafone-Idea">Vodafone Idea</keyword>’s announcement in September where it revealed its plans to raise ₹25,000 crore by selling its shares and debt. New funds and price hikes are the only way to save Vodafone-Idea As Vodafone Idea continues to lose subscribers, it's also running out of money. This limits the company’s ability to invest in networks and adds to subscribers’ woes who switch over to other telecom operators. “We believe this spiral can be broken only with significant ARPU increase and fund infusion,” said Edelweiss Research in its report dated October 30. According to Axis Capital, Vodafone Idea’s future depends on it. The new mega tower company In the endeavour to raise new funds, Vodafone Idea has sold off around 11.15% of its holding in Indus Towers to make way for a newly merged mega tower company. The Vodafone Group will still hold around 28.12% in the new firm. Meanwhile, <keyword id="6354287" type="UNKNOWN" weightage="20" keywordseo="bharti-airtel">Bharti Airtel</keyword>’s stake reduces from 53.51% in Bharti Infratel to 36.7% in the combined entity. "Merger of Indus Towers Limited &amp; Bharti Infratel Limited has been completed today. The combined entity, to be renamed as Indus Towers Limited, is listed on the National Stock Exchange of India Limited &amp; BSE Limited," said Bharti Airtel in its filing with the Indian exchanges. Oaktree, Varde Partners and others offer $2 billion in funding The Oaktree-led consortium is formed of many companies, including Varde Partners. Sources told <a href="https://www.bloombergquint.com/business/oaktree-varde-said-to-offer-2-billion-funding-to-vodafone-idea">Bloomberg</a> that they have made an offer to infuse between $2 billion to $2.5 billion of capital into Vodafone Idea. But, this is only one of the many offers that the company is currently considering. Vodafone Idea is in talks with several other investors. The company has been reporting losses for nine consecutive quarters. And, since the merger of 2017, Vodafone Idea is yet to come up green in its annual reports. Vodafone Idea is the weakest of three telecom giants in India, the other two being Bharti Airtel and Reliance Jio. And its survival is the only thing that’s standing in the way of the Indian telecom market turning into a duopoly. SEE ALSO: <a href="https://www.businessinsider.in/tech/apps/news/pubg-mobile-india-was-supposed-to-launch-today/articleshow/79315462.cms">PUBG Mobile India was rumoured to launch today — but there is no official update from the company</a> <a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-ril-infosys-vodafone-idea-apollo-hospitals-emami-route-mobile-syngene-and-others/articleshow/79314343.cms">Top stocks to watch — RIL, Infosys, Vodafone-Idea, Apollo Hospitals, Emami, Route Mobile, Syngene, and others</a> <a href="https://www.businessinsider.in/finance/banks/news/lakshmi-vilas-bank-is-the-fifth-financial-firm-after-ilfs-dhfl-yes-bank-and-pmc-bank-to-collapse-in-india/slidelist/79286096.cms">Lakshmi Vilas Bank is the fifth financial firm to collapse in India within the last 30 months</a>

Vodafone Idea soars nearly 5% on fund infusion from Indus Towers stake sale

<ul><li>Vodafone Idea’s board has approved fundraising of up to ₹25,000 crore by way of debt and equity.</li><li> The infusion of funds will allow the company to meet the adjusted gross revenue (AGR) obligations for the next two years, giving it room to breathe while it optimizes its operations and hikes tariffs.</li><li> The fundraising will give a boost to the telco’s balance sheet which is currently reeling under the burden of the AGR demand which stands at ₹50,339 crore.</li><li> <a href="https://www.businessinsider.in/business/telecom/news/supreme-court-asks-airtel-vodafone-idea-and-others-to-pay-agr-dues-over-10-years/articleshow/77866137.cms">Check out the latest news and updates on Business Insider.</a></li></ul> Vodafone Idea has confirmed that it is raising up to ₹25,000 crore by way of selling shares and taking loans. In an exchange filing today, the struggling telecom company announced a fundraising of ₹15,000 crore, with an upper limit of ₹25,000 crore. In an exchange filing, Vodafone Idea stated that its board has approved fund raising of up to ₹15,000 crore through equity shares or debentures. The sale of equity shares can be through either public offer or private placement, leaving the window open for other companies to acquire a stake in the company. This comes at a time when companies like Google, Amazon and Verizon have been reportedly planning to invest in Vodafone Idea. The regulatory filing also states that the total fundraising has been capped at ₹25,000 crore, but the maximum amount that will be raised via loans is capped at ₹15,000 crore. The remaining, if any, will be done via sale of equity shares. <div type="Article" hostid="261" msid="77923943" title="Vodafone Idea may need up to ₹18,800 crore in next two years and tariff hikes to survive, says a new report" mstype="2" mssubtype="0"></div> The struggling telco needs a combination of tariff hikes, government support and fund raising to survive beyond the current year. According to a report by Jefferies Equity Research, dated September 1, Vodafone Idea could require up to ₹18,800 crore by the end of March 2023. To do so, it will need to raise money since its existing operating profit is less than annual payments that will be due. <table style="border-collapse:collapse;mso-yfti-tbllook:1184"> <tbody><tr> <td style="border:solid black 1.0pt;mso-border-alt:solid black .5pt; mso-border-bottom-alt:solid black 1.0pt;padding:5.0pt 5.0pt 5.0pt 5.0pt; height:25.0pt"> Particulars </td> <td style="border:solid black 1.0pt;border-left:none;mso-border-left-alt: solid black .5pt;mso-border-alt:solid black .5pt;mso-border-bottom-alt:solid black 1.0pt; padding:5.0pt 5.0pt 5.0pt 5.0pt;height:25.0pt"> Amount </td> <td style="border:solid black 1.0pt;border-left:none;mso-border-left-alt: solid black .5pt;mso-border-alt:solid black .5pt;mso-border-bottom-alt:solid black 1.0pt; padding:5.0pt 5.0pt 5.0pt 5.0pt;height:25.0pt"> Liabilities </td> <td style="border:solid black 1.0pt;border-left:none;mso-border-left-alt: solid black .5pt;mso-border-alt:solid black .5pt;mso-border-bottom-alt:solid black 1.0pt; padding:5.0pt 5.0pt 5.0pt 5.0pt;height:25.0pt"> Amount </td> </tr> <tr> <td style="border:solid black 1.0pt;border-top:none;mso-border-top-alt: solid black 1.0pt;mso-border-alt:solid black .5pt;mso-border-top-alt:solid black 1.0pt; background:#D9D9D9;padding:5.0pt 5.0pt 5.0pt 5.0pt;height:25.0pt"> Free cash flow </td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; border-right:solid black 1.0pt;mso-border-top-alt:solid black 1.0pt; mso-border-left-alt:solid black .5pt;mso-border-alt:solid black .5pt; mso-border-top-alt:solid black 1.0pt;background:#D9D9D9;padding:5.0pt 5.0pt 5.0pt 5.0pt; height:25.0pt"> ₹2,500 crore </td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; border-right:solid black 1.0pt;mso-border-top-alt:solid black 1.0pt; mso-border-left-alt:solid black .5pt;mso-border-alt:solid black .5pt; mso-border-top-alt:solid black 1.0pt;background:#D9D9D9;padding:5.0pt 5.0pt 5.0pt 5.0pt; height:25.0pt"> Annual AGR obligation </td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; border-right:solid black 1.0pt;mso-border-top-alt:solid black 1.0pt; mso-border-left-alt:solid black .5pt;mso-border-alt:solid black .5pt; mso-border-top-alt:solid black 1.0pt;background:#D9D9D9;padding:5.0pt 5.0pt 5.0pt 5.0pt; height:25.0pt"> ₹7,844 crore </td> </tr> <tr> <td style="border:solid black 1.0pt;border-top:none;mso-border-top-alt: solid black .5pt;mso-border-alt:solid black .5pt;padding:5.0pt 5.0pt 5.0pt 5.0pt; height:25.0pt"> Operating profit (annualised) </td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; border-right:solid black 1.0pt;mso-border-top-alt:solid black .5pt; mso-border-left-alt:solid black .5pt;mso-border-alt:solid black .5pt; padding:5.0pt 5.0pt 5.0pt 5.0pt;height:25.0pt"> ₹6,100 crore </td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; border-right:solid black 1.0pt;mso-border-top-alt:solid black .5pt; mso-border-left-alt:solid black .5pt;mso-border-alt:solid black .5pt; padding:5.0pt 5.0pt 5.0pt 5.0pt;height:25.0pt"></td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; border-right:solid black 1.0pt;mso-border-top-alt:solid black .5pt; mso-border-left-alt:solid black .5pt;mso-border-alt:solid black .5pt; padding:5.0pt 5.0pt 5.0pt 5.0pt;height:25.0pt"></td> </tr> <tr> <td style="border:solid black 1.0pt;border-top:none;mso-border-top-alt: solid black .5pt;mso-border-alt:solid black .5pt;background:#D9D9D9; padding:5.0pt 5.0pt 5.0pt 5.0pt;height:25.0pt"> Cost savings from Vodafone-Idea merger </td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; border-right:solid black 1.0pt;mso-border-top-alt:solid black .5pt; mso-border-left-alt:solid black .5pt;mso-border-alt:solid black .5pt; background:#D9D9D9;padding:5.0pt 5.0pt 5.0pt 5.0pt;height:25.0pt"> ₹4,000 crore </td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; border-right:solid black 1.0pt;mso-border-top-alt:solid black .5pt; mso-border-left-alt:solid black .5pt;mso-border-alt:solid black .5pt; background:#D9D9D9;padding:5.0pt 5.0pt 5.0pt 5.0pt;height:25.0pt"></td> <td style="border-top:none;border-left:none;border-bottom:solid black 1.0pt; border-right:solid black 1.0pt;mso-border-top-alt:solid black .5pt; mso-border-left-alt:solid black .5pt;mso-border-alt:solid black .5pt; background:#D9D9D9;padding:5.0pt 5.0pt 5.0pt 5.0pt;height:25.0pt"></td> </tr> </tbody></table> Source: Company reports, Jefferies Equity Research Note: Annual AGR dues computed with an assumption of 9% interest rate per annum. But beyond FY21, the cash gap will widen to ₹4,200 crore and by FY23, it will balloon to ₹18,800 crore, the report states. Now that it has announced fundraising, the second option for Vodafone Idea is to announce tariff hikes. The Jefferies report suggests that a minimum 10% hike in tariffs is to be expected, but Vodafone Idea needs as much as 27% hike to cover its cash flow needs. SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-may-need-up-to-18800-crore-in-next-two-years-and-tariff-hikes-to-survive-says-a-new-report/articleshow/77923943.cms">Vodafone Idea may need up to ₹18,800 crore in next two years and tariff hikes to survive, says a new report</a> <a href="https://www.businessinsider.in/business/telecom/news/supreme-court-asks-airtel-vodafone-idea-and-others-to-pay-agr-dues-over-10-years/articleshow/77866137.cms">Supreme Court directs Airtel, Vodafone Idea and others to pay AGR dues over 10 years</a> <a href="https://www.businessinsider.in/business/telecom/news/the-agr-verdict-could-lead-to-a-reliance-jio-and-airtel-duopoly-in-the-indian-telecom-sector/articleshow/77883407.cms">The AGR verdict could lead to a Reliance Jio and Airtel duopoly in the Indian telecom sector</a> <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-news-how-much-cash-does-vodafone-idea-need-to-survive/articleshow/76766763.cms">Only cash can save Vodafone Idea from a slow death</a>

Vodafone Idea will raise up to ₹25,000 crore by selling shares and taking loans

<ul><li><keyword id="1553175" type="COMPANY" weightage="20" keywordseo="Vodafone-Idea">Vodafone Idea</keyword> needs a combination of tariff hikes, government support and fund raising to survive in the market, say analysts.</li><li>The struggling telco has a total (adjusted gross revenue) AGR liability of ₹58,254 crore, out of which ₹50,339 crore is still due.</li><li>The gap between Vodafone Idea’s operating profit and the payments due may balloon to ₹18,800 crore in next two years.</li><li>Reports of an investment of more than $4 billion by Amazon and Verizon sent the stock rallying by 30% on September 3, suggesting that investors believe Vodafone Idea is in a dire situation.</li><li><a href="https://www.businessinsider.in/business/telecom/news/supreme-court-asks-airtel-vodafone-idea-and-others-to-pay-agr-dues-over-10-years/articleshow/77866137.cms">Check out the latest news and updates on Business Insider.</a></li></ul>Vodafone Idea is staring at a difficult road ahead. With the Supreme Court fixing a 10-year payment timeline for the adjusted gross revenue (AGR) dues, the struggling mobile service provider needs a combination of tariff hikes, government support and fundraising to survive. According to a report by Jefferies Equity Research, dated September 1, Vodafone Idea could require up to ₹18,800 crore by the end of March 2023. To do so, it will need to raise money since its existing operating profit is less than annual payments that will be due. Therefore, the Board is meeting today (September 4) to consider a proposal to raise funds. <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Particulars </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Amount </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Liabilities </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Amount </td></tr><tr><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Free cash flow </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹2,500 crore </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Annual AGR obligation </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹7,844 crore </td></tr><tr><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Operating profit (annualised) </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹6,100 crore </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Cost savings from Vodafone-Idea merger </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹4,000 crore </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td><td style="border-left:solid #000000 0.6260872500000001pt;border-right:solid #000000 0.6260872500000001pt;border-bottom:solid #000000 0.6260872500000001pt;border-top:solid #000000 0.6260872500000001pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr></tbody></table> Source: Company reports, Jefferies Equity Research Note: Annual AGR dues computed with an assumption of 9% interest rate per annum. But beyond FY21, the cash gap will widen to ₹4,200 crore and by FY23, it will balloon to ₹18,800 crore, the report states. <div type="Article" hostid="261" msid="77866137" title="Supreme Court directs Airtel, Vodafone Idea and others to pay AGR dues over 10 years" mstype="2" mssubtype="0"></div> What does Vodafone Idea need to do to survive? There are two ways for Vodafone Idea to continue its operations – tariff hikes and additional fund raising. In the first round of tariff hikes of 30%, Vodafone Idea’s operating profits increased by 20%. “Vodafone Idea may need additional support from the government in the form of a further 2-year moratorium on deferred spectrum liabilities to remain solvent beyond FY23,” the report added. <div type="Article" hostid="261" msid="76766763" title="Vodafone Idea News - Only cash can save Vodafone Idea from a slow death" mstype="2" mssubtype="0"></div> Apart from this, fundraising also remains a critical piece of the puzzle for the company. <a href="https://www.livemint.com/companies/news/amazon-verizon-may-give-voda-idea-lifeline-11599102122521.html">Reports</a> of an investment of more than $4 billion (approx. ₹30,000 crore) from US giants Amazon and Verizon led to a 30% jump in the company’s share price on September 3. Another <a href="https://www.bloomberg.com/news/articles/2020-09-03/vodafone-s-india-unit-is-said-to-plan-1-5-billion-fundraising">report</a> suggested that the company is planning $1.5 billion (approx. ₹7,400 crore) fundraising via stake sale. Vodafone Idea’s board is assembling today to evaluate any and all fundraising proposals it has received. If this deal goes through, Vodafone Idea will have enough room to breathe easy for now and meet its AGR obligations. It could also allow the company to undertake capital expenditure required to boost its network quality and stem the outflow of subscribers. SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-news-how-much-cash-does-vodafone-idea-need-to-survive/articleshow/76766763.cms">Only cash can save Vodafone Idea from a slow death</a> <a href="https://www.businessinsider.in/business/telecom/news/the-agr-verdict-could-lead-to-a-reliance-jio-and-airtel-duopoly-in-the-indian-telecom-sector/articleshow/77883407.cms">The AGR verdict could lead to a Reliance Jio and Airtel duopoly in the Indian telecom sector</a> <a href="https://www.businessinsider.in/tech/news/google-explores-5-stake-in-struggling-vodafone-idea-report/articleshow/76070370.cms">Vodafone Idea shares surge more than 30% after Google reportedly considers a stake in the debt-laden telco</a>

Vodafone Idea may need up to ₹18,800 crore in next two years and tariff hikes to survive, says a new report

<ul><li><keyword id="7946308" type="General" weightage="100" keywordseo="5g-spectrum-auctions" source="Orion">5G spectrum auctions</keyword> are almost here after years of delay.</li><li>With the AGR dues case behind them, telcos and the government are coordinating to address each other’s needs.</li><li>Yet, <keyword id="6450594" type="General" weightage="20" keywordseo="5g-spectrum" source="Orion">5G spectrum</keyword> auctions may not offer the bumper harvest that 4G did.</li><li>We decode all the reasons that telcos have to go slow with bidding for <keyword id="764355" type="General" weightage="20" keywordseo="5g" source="Orion">5G</keyword> spectrum.</li></ul>The government has been pinning its hopes on a bumper earnings from 5G spectrum sale to bolster its revenues, but experts suggest it should temper its expectations and not expect a repeat of 4G spectrum auctions. 5G spectrum auctions are scheduled to begin on July 26, 2022. All the three leading telcos – <keyword id="6354504" type="General" weightage="20" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword>, <keyword id="15491" type="General" weightage="20" keywordseo="airtel" source="Orion">Airtel</keyword> and <keyword id="1553175" type="General" weightage="20" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword> – have tested their networks and demonstrated that they are 5G ready. But the government has been pushing back the auctions – to settle the ongoing issue of <a href="https://www.businessinsider.in/business/telecom/news/airtel-opts-for-agr-dues-moratorium-becomes-the-second-telco-to-do-so/articleshow/87254202.cms">AGR dues</a>. India’s telecom ministry and regulator sprung into action to speed up the auction process. But, its first roadblock came in after the telcos petitioned the government for a 90% cut in base spectrum prices. However, the government cut them only by 40%. The government is banking on spectrum auctions to fill its coffers, at a time when fiscal deficit in April and May has shot up to 12% of the budgeted estimate, as opposed to 8% in the same period last year. <div type="Article" hostid="261" msid="92521472" title="Akash Ambani to head Reliance Jio - that’s just phase I of Mukesh Ambani’s succession plan" mstype="2" mssubtype="0"></div> The LIC IPO fizzled out, rising inflation and the Rupee hitting record lows in the last week resulting in a decline of billions of dollars in <a href="https://www.businessinsider.in/finance/news/rbis-efforts-to-save-rupee-has-made-a-big-dent-in-its-forex-reserves/articleshow/92654557.cms">forex reserves</a> – there are several reasons for the government to extract as much as it can from the telcos. However, given the way 5G spectrum usage policies are shaping up, a bumper harvest like it was the case with 4G seems to be difficult. <cmsannotation type="cmsannotation" annotationid="Why the govt should not expect a bumper harvest from 5G spectrum auctions" comment="subhead" text="Why the govt should not expect a bumper harvest from 5G spectrum auctions">Why the govt should not expect a bumper harvest from 5G spectrum auctions</cmsannotation> The last major spectrum auction to take place was that of 4G spectrum in 2021 – this was after the telecom industry went through years of distress and consolidation after Jio’s entry in 2016. The government scooped up ₹77,800 crore from the auctions despite only a third of the spectrum being acquired by telcos. Telcos bid for the spectrum strategically, too – with the bulk of the purchases made in the mid-range, which is capable of delivering speeds ranging from 100-900 Mbps. “Don’t expect a bidding war. More than adequate spectrum is available for the three operators,” stated a report by JP Morgan. That and getting less than the desired price cut leaves telcos with little motivation or the need to bid aggressively for 5G spectrum. <div type="Article" hostid="261" msid="92356710" title="INTERVIEW: The big picture on 5G, Big Tech-telco war with COAI’s Dr SP Kochhar" mstype="2" mssubtype="0"></div> <cmsannotation type="cmsannotation" annotationid="Private 5G networks could also play spoilsport" comment="subhead" text="Private 5G networks could also play spoilsport">Private 5G networks could also play spoilsport</cmsannotation> The government allowing private 5G networks – that is, companies like TCS, for instance, can run their own private networks by bidding for the respective category – has also raised the hackles of telcos. COAI, the industry body representing telcos, has asked the government to impose ‘tough conditions’ for allowing private companies to run their own 5G networks. COAI’s director general Dr SP Kochhar <a href="https://www.businessinsider.in/business/telecom/news/interview-the-big-picture-on-5g-big-tech-telco-war-with-coais-dr-sp-kochhar/articleshow/92356710.cms">told</a> Business Insider India that enterprises will likely contribute to 70% of 5G revenue, and if telcos can’t serve Big Tech, then they will have to draw up new business plans. “Relatively high prices and the risk of dilution to telcos’ upside, with DoT approving direct allocation of spectrum to enterprises for deploying private networks, are negatives,” stated a report by IIFL Securities. Essentially, the clients which telcos are trying to bag as 5G consumers, will turn into competitive bidders. <cmsannotation type="cmsannotation" annotationid="Spectrum sharing – sweetener for telcos, sour for the govt" comment="subhead" text="Spectrum sharing – sweetener for telcos, sour for the govt">Spectrum sharing – sweetener for telcos, sour for the govt</cmsannotation> Another reason why 5G spectrum auction could fizzle out is spectrum sharing – according to a report, TRAI is apparently considering allowing telcos to share airwaves. This will solve two problems – first, telcos can monetize spectrum where they have it in excess, or if they need additional spectrum but don’t own it in a given circle, they can lease it from another telco. This should also alleviate liquidity concerns for the telcos involved. Secondly, telcos will also be discouraged from having idle airwaves. “But now with merely three players in the market with only two of them looking for serious investments, and the government's plan to offer spectrum through an annual schedule, there seems limited need to invest at a high price,” said a report by Motilal Oswal. <div type="Article" hostid="261" msid="92382529" title="5G in India – does the aam aadmi even need it?" mstype="2" mssubtype="0"></div> While spectrum sharing exists today, it’s restrictive and requires both the telcos to hold licenses in the same circle and frequency. TRAI is <a href="https://economictimes.indiatimes.com/industry/telecom/telecom-news/trai-looking-at-easing-spectrum-sharing-rules/articleshow/92446321.cms">exploring</a> the removal of these restrictions. However, if this passes, the government may end up realizing even less money from auctions. <cmsannotation type="cmsannotation" annotationid="How telcos could bid for 5G spectrum" comment="subhead" text="How telcos could bid for 5G spectrum">How telcos could bid for 5G spectrum</cmsannotation> Analysts at IIFL Securities believe that telcos could go for only 4 out of 10 bands, with Jio and Airtel topping up their sub-GHz holdings. For now, telcos are likely to focus on the crucial 850MHz and 900MHz frequencies, while the more expensive 600MHz and 700MHz frequencies might not see any action, the report added. The mid-range, where telcos already hold over 670MHz spectrum, might not see any action. Overall, the report concludes that telcos could bid for spectrum worth ₹71,000 crore – considerably lower than the ₹78,000 crore that the government scooped up from 4G spectrum auctions. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/finance/news/rbis-efforts-to-save-rupee-has-made-a-big-dent-in-its-forex-reserves/articleshow/92654557.cms">RBI’s ‘Save the Rupee’ bill has hit over $40 billion already and it could add another $40 billion this year</a> <a href="https://www.businessinsider.in/business/corporates/news/ambani-and-adani-valuations-surge-while-tatas-birlas-see-major-declines-in-the-first-half-of-2022/articleshow/92593235.cms">Ambani and Adani valuations surge while Tatas, Birlas see major declines in the first half of 2022</a> <a href="https://www.businessinsider.in/business/corporates/news/mukesh-ambani-steps-down-as-director-of-reliance-jio-akash-ambani-appointed-chairman/articleshow/92521472.cms">Akash Ambani to head Reliance Jio - that’s just phase I of Mukesh Ambani’s succession plan</a>

5G spectrum auctions might not see a bidding war as there’s ‘enough’ for everyone

<ul><li>Vodafone Idea’s stock crashed by 27% in today’s trade, closing at ₹6.7 per share. </li><li>As much as ₹1,400 crore, about $200 million, was lost in a single day’s trade.</li><li>Vodafone Idea posted a net loss of ₹4,874 crore, or over $700 million, in the first quarter of the current financial year. </li></ul> Vodafone Idea’s stock crashed by a massive 27% in today’s trade, closing at ₹6.7 per share. It means that as much as ₹1,400 crore, about $200 million, was lost in a single day’s trade. On Friday (July 26), Vodafone Idea posted a net loss of ₹4,874 crore, or over $700 million, in the first quarter of the current financial year. “Vodafone Idea’s results disappointed with revenues, EBIDTA (pre-tax profits), and a loss ---all missed estimates,” said a report by CLSA, which retained its ‘Sell’ recommendation. In the long-run Top telecom operators Vodafone and Idea Cellular had merged last year, and these synergies will start paying off in a year. “We are delivering on our stated strategy, although the benefits are not yet visible in our top line. We are well on track to deliver our synergy targets by Q1 of 2020-21. We expect these factors to increasingly contribute to our financial performance going forward,” said Balesh Sharma, CEO Vodafone Idea. But the shareholders were clearly not in the mood to wait so long. The company, in spite of its size, is unable to keep up with competition from Reliance Jio, which has been gaining subscribers at <a href="https://www.businessinsider.in/mukesh-ambani-owned-reliance-vs-vodafone-idea-vs-airtel-vs-bsnl-january-to-april-2019-subscriber-data/articleshow/69928185.cms">Vodafone Idea’s cost</a>. Vodafone Idea has been losing in terms of quantity and quality of subscribers as well. Its average revenue per user rose by a mere 4% to ₹108. Added to that, some of its best paying customers also downtraded which means went in for cheaper plans, leaving it with fewer profits.

Vodafone Idea lost $700 million in 3 months, but its investors lost $200 million in a day

<ul><li>Vodafone Idea posted a net loss of ₹4,874 crore, or $700 million, in the first quarter of the current financial year. </li><li>The company’s profit margins though almost doubled to 32.4% from the 15.2% in the fourth quarter ending March 2019. </li><li>Its average revenue per user or ARPU stood at ₹108, which went up by 3.3% quarter on quarter. </li></ul> Vodafone Idea posted a net loss of ₹4,874 crore, or over $700 million, in the first quarter of the current financial year. In the last quarter ending March 2019, it posted ₹4,881 crore in profits. On a quarter on quarter comparison, revenues fell by 4.3% to ₹11,269 crore mostly due to customers churn who recharged with service validity vouchers. The company said that its best customers or those who provide it with high revenues, have ‘down-traded’. It means that they have moved away to cheaper plans or service providers who offer bargains. ‘Benefits not visible on topline’ The company’s profit margins though almost doubled to 32.4% from 15.2% in the fourth quarter ending March 2019. “We are delivering on our stated strategy, although the benefits are not yet visible in our top line. We are well on track to deliver our synergy targets by Q1 of 2020-21. We expect these factors to increasingly contribute to our financial performance going forward,” said Balesh Sharma, CEO Vodafone Idea. The company also said that they are working towards integration of Vodafone India and Idea Cellular, which is improving customers’ data experience. “We now lead the league tables on data download speeds in Delhi, West Bengal and Chennai,” said Sharma. Its average revenue per user or ARPU stood at ₹108, which went up by 3.3% quarter on quarter. The stock of Vodafone Idea fell by 4.8% in today’s trade ahead of earnings announcement. Price war rages on Analysts believe that Vodafone’s fate will largely depend on the pricing strategy of competitors. That means if Jio increases prices, it will create room for others too, to follow suit thereby improving its chances at margins. At this juncture though, Vodafone Idea can make few mistakes as it is in a tough cash position. “VIL is moving in the right direction by strengthening 4G rollouts, balance sheet through rights issue, stake sale in Indus and potential monetization of fiber assets. That said, low EBITDA, substantially higher leverage and persistent cash burn has put VIL in precarious position with limited room to err. Synergy benefits, substantial 4G sub additions and tariff hikes are essential,” said an HDFC report in May, after its March 2018-19 results.

You Searched For "vodafone idea sale" and got 12 results

Ahead of FPO, Vodafone Idea garners Rs 5,400 cr from anchor investors

PTI

Vodafone Idea reportedly wants the government to release ₹15,000 crore bank guarantees ahead of its fundraising plan

Rounak Jain

Jio adds 3 million subscribers in March, Vodafone Idea loses 1.2 million

PTI

The enormous gap between Vodafone Idea on one hand, Airtel and Jio on the other

Rounak Jain

Vodafone Idea will have a solid ‘turnaround’ war chest if it clinches the Amazon deal

Rounak Jain

Even a big fundraise is not helping Vodafone investors as Russia-Ukraine conflict takes the wind out of global markets

Rounak Jain

Vodafone Idea soars nearly 5% on fund infusion from Indus Towers stake sale

Prabhjote Gill

Vodafone Idea will raise up to ₹25,000 crore by selling shares and taking loans

Rounak Jain

Vodafone Idea may need up to ₹18,800 crore in next two years and tariff hikes to survive, says a new report

Rounak Jain

5G spectrum auctions might not see a bidding war as there’s ‘enough’ for everyone

Rounak Jain

Vodafone Idea lost $700 million in 3 months, but its investors lost $200 million in a day

Katya Naidu

Vodafone Idea clocks a loss over $700 million in 3 months as Reliance Jio's price war continues to bite

Katya Naidu

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