Some interesting comments-Earnings call Q2 FY23, Akshaya Moondra, CEO, VIL

“We have reported five quarters of sequential growth in several key metrics, including ARPU and 4G subscriber addition. We remain focused on providing superior data and voice experience and building a differentiated digital experience adding several digital offerings in recent months.

The transaction with ATC also clearly reflects the relationship that the company shares with one of its key vendors, their belief and long term prospects of the company and builds confidence towards further capital raise. We also continue to actively engage with our lenders and investors for further fundraising.

All these initiatives, coupled with the liquidity provided by the government reforms package, direct corrections and positive impetus from draft Telecom Bill will enable VIL to make network investments and compete effectively to improve its overall position.

Q-A session:
Issuance of OCDs to ATC India. ATC India is one of the largest infrastructure service providers for Vi will tend to be rather strong long term relationship. In the spirit of this partnership, we are pleased to announce that ATC India has agreed to subscribe to the optionally convertible debentures amounting to Rs 16 billion. These funds will be used to pay certain agreed amounts owed to ATC India under the master lease agreement and, to the extent of remainder, for general corporate purposes. The issuance of OCDs will be subject to certain conditions precedent, including the approval by VIL shareholders and the conversion of interest from deferment of AGR and spectrum views into equity, by Government of India. The engagement, cooperation and support to this transaction reflects ATC India’s underlying confidence in the company and its plans. Both parties remain committed to develop a top quality nationwide 4G & 5G network as well as contribute towards India’s digital transformation. We believe that this step will facilitate further capital raise by the company.

The funding discussions have been going on. This was largely dependent on two things, the return of the bank guarantees by the DoT, which happened in early April, and post that, the second most important event, which needs to be completed is the government conversion into equity.

Relating to the option to convert Rs 16,130-crore accrued interest on deferred AGR-related dues into equity government conversion, we are in discussion with the government. And I also do not know exactly the reason why this is not happening. Government is taking some time. We had exercised this option to convert in January, post that we had a discussion with DoT, they sent a letter to us in March, we confirmed the amount of conversion, which was agreed between DoT and us in April. Post that we had no communication from them in this matter. So we continue to be engage with DoT, I would say that the discussions are in an advanced stage. And we should be able to conclude soon.

In terms of CapEx, till the time the funding is in place, any significant CapEx increase is not possible. We are currently in discussions with the banks. Our priorities are operational payments, lender payments, and then CapEx investments. There’s a schedule of repayment of loans which we continue to pay on the scheduled date. We are trying to close the funding quickly, so that some of the backlog of vendor payments can be addressed.

Our challenge is not quality of network, but on coverage. Where we do not have a 4G network currently is definitely impacting us. And yes, that’s part of the risk that we run to expand the 4G coverage that is dependent on the funding. And to that extent, churn is getting impacted.

Yes, both 4G coverage expansion and the 5G rollout will depend on the funding.

To drive 5G ecosystem development in the country for faster adoption of services, we have partnered with leading device OEMs to have Vi 5G provision products, user and time for market rollout. We are ready for the next journey of growth with 5G technology. Once the funding is in place, we will be able to roll out and execute quite quickly. Generally, the rollout is fairly modular. Also, from a perspective of backhaul, now that the E-band has also been offered by the government, expanding high capacity networks can also be addressed.”

Also read,
1.https://www.communicationstoday.co.in/vodafone-idea-higher-arpu-pushes-mobile-revenue-icici-securities/
2.https://www.communicationstoday.co.in/vi-continues-to-struggle-with-churn-and-leverage/
3.https://www.communicationstoday.co.in/vi-reports-higher-losses-and-churn-as-revenues-and-arpu-improve-in-q2fy23/

CT Bureau