A confident Ravinder Takkar addresses the media

Ravinder Takkar, CEO and managing director, Vodafone Idea was in a media interaction on September 22, 2021.

“The recent telecom reforms unveiled by the government has addressed all investor concerns. The enthusiasm and interest to invest in the sector has increased with the government’s package.

To what extent the co-promoters will participate and in what ways is something which only they can answer, but they have been very supportive all along. They have invested Rs 1.90 lakh crore in the last 10 years. I am not aware of any statement that the company will not infuse any equity in its Indian operations, and by whom it has been made.

The government sees the telecom sector as important and wants three private players to stay and there’s no doubt that we will not only stay but also be competitive. It was always our conviction but not always understood by other market participants.

After the guidelines (on the clause related to the four-year moratorium on AGR and spectrum dues, where the operators have the option to pay the deferred NPV amount in equity,) are announced, we would know exactly what the conversion would look like. But I think our understanding so far is that the interest associated with the delay is the choice that we can make and convert into equity. I would need to see the details and need approval from the board but I would imagine that is something we would be open to exercise.

Since the AGR dues need to be paid over a period of five years (on the second part where the government has the option of converting the principal amount, in case a company fails to pay at the end of four years, into equity ) and spectrum even longer, till the duration of its lease, there will be enough time to look into the issue. There is relief in paying right now but even after four years there could be an opportunity for government to continue providing liquidity to the industry.

The moratorium has given the company the opportunity to invest in networks, customer service and in buying more spectrum.

With this package there’s no need for it (to have a floor price for tariffs). In the past pricing was used as a tool to create stress in the industry and therefore the operators had demanded for a floor price. Since the government has said that reforms will happen, am sure pricing will also start to improve in the sector. The environment is such where the industry can take the pricing in the right direction.

I am confident that the pricing will start to improve, hopefully in the coming weeks and months. The average ARPU of the industry today is around Rs 130. Five years ago in 2016, it was over Rs 200. So, the most important thing is that we first we need to get the ARPU back to Rs 200 and eventually to Rs 300.

Vodafone Idea won’t be an outlier in terms of raising tariffs but would also not shy of taking the first step when the time is right,” he concluded.
CT Bureau