Despite recent tariff increases and moratorium easing, struggling telecom player Vodafone Idea may have to close its Rs 10,000 crore fundraising plan from non-promoters to increase its investment capital significantly to increase the upgrade of users to 4G, according to analysts.
Vodafone Idea continues to lose its active subscribers over the last many months.
Vi’s active subscriber base decreased by 2.3 million in May 2022, which continued the declining trend over the last many months due to the excessive departure in the lower ARPU segments given the prepaid tariff increases at start-up level implemented in July and November last year, according to analysts at JM Financial.
We added 1.3 million users in May this year compared to a decrease of 0.4 million in April, but the decline in active subscribers continued. The total subscriber base decreased by DKK 0.8 million. The circles in Delhi, Maharashtra and Mumbai experienced the largest decreases in VLR (active) base, while UP (E and W) experienced the largest increases in their VLR base.
We shareholders recently approved an Rs 436 cr equity allocation to Vodafone Group, which owns 58.46% of the shares in the company and Aditya Birla Group 16.53%. We had raised 3,375 crore Rs from Vodafone Group and 1,125 crore Rs from Aditya Birla Group in March. It has been struggling to raise funds from external sources for the past two years. Through its moratorium package, the government has allowed Vi to convert around 16,100 crore interest contributions into around 33 percent of the shares in the company in order to provide liquidity for investments in the company.
Despite this, analysts feel that fundraising plans should close soon.
Market leader Reliance Jio continued to add a maximum of 3.11 million new subscribers, while Bharti Airtel added 1.02 million subscribers. At the end of May, Jio had a total subscriber base of 408.79 million, while Airtel had 362.18 million.
Gradually, market share has shifted in favor of Jio and Bharti Airtel since the recent tariff increase, according to analysts at Morgan Stanley.
Market share trends were stable month-on-month and showed an increase in favor of Airtel since November 2021 – when tariff increases were announced. On an active subscriber basis, Jio has a 37.7% market share, while Airtel has 34.9% and Vi 21.6%. Market share has been stable for Airtel since November 2021, and Jio captured the entire stock loss of Vi on an active subscriber base, Morgan Stanley said in an analyst report.
The total subscriber base in the industry grew by 2.8 million – the highest in the last 10 months. Jio added 3.1 million subscribers – the highest in the last 10 months. Bharti, which added 1 million subscribers, was in second place.
With its subscriber cleanup and SIM consolidation largely over, Jio should continue to report industry-leading subscriber additions, according to a report from Emkay.
Jio also led the package in wireless broadband subscribers, with 3.1 million additions, and was closely followed by Bharti with 1.9 million additions and Vi with 1.2 million users.
Jio continued its winning streak in wireline subscribers by adding 0.26 million subscribers, while Bharti added 0.11 million. Jio has expanded its lead further and now has 5.9 million wireline broadband subscribers in total, while Bharti has 4.7 million. Mac Pro Tricks