VIL says 10-yr schedule to pay dues 'good outcome
New Delhi: Vodafone Idea Ltd, India's struggling third largest mobile operator, on Monday said 10 years granted to telcos to clear past statutory dues was "a good outcome" but mobile tariffs need to be raised for the industry to survive. The company also unveiled a new brand identity, 'Vi' as it looked to regain lost market share through an image makeover.
"The brand integration not only marks the completion of the largest telecom merger in the world, but also sets us on our future journey to offer world class digital experiences to 1 billion Indians on our strong 4G network," Ravinder Takkar, MD and CEO, Vodafone Idea Ltd said at a call with media to unveil the new brand identity.
He, however, did not clearly say if the company - which had about 280 million subscribers as of June - would have enough cash to pay all of its remaining over Rs 50,000 crore Adjusted Gross Revenue (AGR) liabilities.
"Besides the 10 years part, which was an important element of the judgement, there is also an initial payment which was 10 per cent which we have already paid, of the amounts that have been given by DoT (Department of Telecom). So, our first payment based on the outcome of the judgement is going to be in March 2022 of the first of the 10-year installments, which I think is eventually a good outcome, and we are happy with that," Takkar said.
Last week, the board of Vodafone Idea Ltd (VIL) approved a fund-raising plan involving a mix of debt (up to Rs 15,000 crore) and equity (up to Rs 15,000 crore), totaling a maximum of Rs 25,000 crore.
The plan is to be taken up for approval at the company's AGM on September 30.
While the company plans to cash out its stake in Indus Towers once the merger between Bharti Infratel and Indus Towers goes through, it has indicated that it is also looking to monetise assets such as fiber and data centres.
To a question on whether Vodafone Group Plc intended to participate in the upcoming fund raising and about promoters' (Vodafone and Aditya Birla Group) overall plans, Takkar said it was something for promoters to deliberate and decide on.
He emphasised that VIL has received tremendous support from both its promoters, and that there was no reason to believe "that any of that support is going to change or come down in the near future, or ever at all".
"Its difficult for me to answer what the promoters will do. We have tremendous support from both the promoters and they have continued to, all the times, give us all the appropriate support and we have no reason to believe that any of that support is going to change or come down in the near future, or ever at all.
"In terms of whether they will specifically invest in the equity part, it is a question for them, it is a choice that they have... they will have to deliberate on those decisions," he said.
VIL CEO further said current mobile tariffs in the country are "unsustainable" and need to be raised.
"Consumers are very much ready to pay additional tariffs - which is something they were paying earlier - to keep the quality of service up, and to ensure there is healthy competition in the industry," he said.
Citing the massive growth in data and voice usage over the past years, he said tariffs must go up initially up to Rs 200, which would be "an important step" and eventually to Rs 300 levels.