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Excerpts from Vi earnings call

In a post earnings call comment of April-June quarter, Akshay Moondra, CEO, Vi acknowledged that the introduction of 5G by competitors Reliance Jio and Bharti Airtel has begun to affect customer numbers, but not significantly. Vodafone Idea will launch 5G services once the funding issue has been resolved, he added.

The telco estimates that it will incur a penalty of Rs 12-13 crore due to its failure to meet the government’s minimum rollout obligations for 5G services. Out of the 17 telecom circles where the company had procured 5G spectrum, it has yet to launch 5G in 15 circles.

Some excerpts from Earnings call
“The company is expected to conclude its funding arrangements in the October-December quarter. The funding structure, which includes both equity and debt, have progressed well in the last couple of months. Particularly in the last one month some of these discussions have started progressing to a level of due diligence or proposals being discussed with these investors. I think we are making good progress and we expect to conclude these discussions in the coming quarter.

As far as debt funding is concerned we have been engaged with our consortium of banks for a long time. Generally their ask is that equity also needs to be tied up and we disclosed that promoters have already given us a support of Rs 2,000 crore of equity and some external equity needs to be tied up, and with that the bank funding will also be tied up.

With the cash generation and payment from promoters, we will be able to manage our debt in this quarter (July-September). From next quarter (October-December), our debt servicing burden goes down significantly roughly at about Rs 500 crore, followed by Rs 1,700 crore in the following quarter and another Rs 500 crore.

Overall, the total debt obligation on the company from October to June 2024 is around Rs 2,700 crore, as against the cash generation of Rs 6,000 crore. We shall start making payments to our vendors from October-December quarter.

Out of 17 circles where we have acquired the spectrum, in two of the circles we have applied for compliance where we have done some minimal investments. In the remaining circles, as per NIA (notice inviting application for spectrum) there is a need to take damages which are applicable. Our intent is not to look at doing only the MRO (minimum rollout obligation) thing for 5G, we would want to rollout a commercial network.

The telecom operators need to change the current tariff structure and charge customers based on their usage. At the higher level of data usage, the users should be charged at higher rates for telcos to increase their ARPU.”

CT Bureau

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