Vi stress: Are we staring at the end?

Three arrows need to be shot at the same time, but all the archers are waiting and looking at the others to see who shoots first, explains a senior private sector banker speaking about the situation at Vodafone Idea Ltd.

A little over a year after the government extended a helping hand, one of India’s storied telecom operators is staring at a bleak future, as it is slowly running out of cash. According to three bankers, who spoke on the condition of anonymity, the going concern status of Vodafone Idea is seriously under question. Its operations may see severe disruptions in three to six months, if the current situation prevails, the bankers said.

Take the firm’s financial position, for example.

As on Sept. 30, the company reported a quarterly loss of Rs 7,596 crore, compared with Rs 7,142 crore a year ago. Revenue from operations rose 12.85% year-on-year to Rs 10,610.5 crore.

According to the data released by Vodafone Idea, the company had outstanding liabilities of Rs 2.2 lakh crore at the end of the second quarter, which includes over Rs 59,000 crore worth of adjusted gross revenue dues to the Department of Telecom. Outstanding debt worth Rs 9,569.7 crore is due to be repaid by Sept. 30, 2023.

The company’s net worth stood at a negative Rs 76,417 crore at the end of the July-September quarter.

The troubles are prevalent even in the telco’s subscriber base. As of Oct. 30, 2022, Vodafone Idea’s outstanding active wireless and wireline subscribers stood at 24.63 crore, down 8.6% year-on-year. In comparison, Jio’s subscriber base fell 0.5% and Bharti Airtel’s base rose 3.4% in the same period. Bloomberg