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Vodafone Idea’s subscriber churn deepens amid cash crunch

The loss of subscribers at Vodafone Idea Ltd. has deepened, even as India’s third-largest telecom company seeks capital to remain a going concern.

The joint venture of Aditya Birla Group and the UK’s Vodafone Group Plc lost a net 1,827,199 subscribers in November 2022, according to data released by the Telecom Regulatory Authority of India on Friday. That compares with net additions of 1,426,817 by Reliance Jio Infocomm Ltd. and 1,056,430 by Bharti Airtel Ltd.

Overall, India’s mobile subscriber base fell 0.05% over the previous month to 1,143.04 million as of Nov. 30, the TRAI data showed.

  • While wireless subscriptions in urban areas rose 0.24% sequentially to 626.60 million, they fell 0.39% month-on-month to 516.45 million in rural areas.
  • Private telecom operators held a 90.35% market share in the mobile telephony space, while public-sector operators held the rest.
  • As many as 12.02 million subscribers submitted their requests for mobile number portability in the month of November 2022.

The wireless teledensity of India fell to 82.64% in November 2022 from 82.75% in the previous month, the telecom regulator’s monthly data showed. The active wireless subscriber base stood at 1,102.33 million as of Nov. 30.

Fiber Optics
The total number of broadband subscribers in India rose 0.47% sequentially to 825.38 million as of Nov. 30, 2022, the TRAI data showed.

  • The total number of wired broadband subscribers rose 1.17% over the previous month to 27.13 million.
  • The shares of urban and rural wired broadband subscribers stood at 92.44% and 7.56%, respectively.

Less than 2% of India’s population accesses the internet through a wired broadband connection.

Vi Bailout
Banks led by the State Bank of India are not in favour of taking further credit exposures to Vodafone Idea, BQ Prime reported earlier this month, citing two people with direct knowledge of the development.

The call follows a request by Vodafone Idea for Rs 7,000 crore worth of emergency financing for the beleaguered telecom company, which was placed in front of a consortium of lenders. The emergency funds would have been used by the company to repay its dues to Indus Towers Ltd. The tower company has faced a financial crunch owing to Vi’s non-payment of dues.

In January 2021, the government agreed to convert its outstanding dues worth around Rs 16,000 crore into a 35.8% equity stake in Vodafone Idea. This move would have diluted the stakes of both promoters in the company.

While this would have reduced some of the burdens on Vodafone Idea, it does not provide the necessary cash to keep the company as a going concern as it is sitting on liabilities worth Rs 2 lakh crore. Bloomberg

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