MUMBAI: Vodafone Concept is open to changing curiosity on deferred statutory dues into authorities fairness, managing director Ravinder Takkar stated, including that the four-year fee moratorium will be sure that the loss-making telco is alive and aggressive.
The corporate invested the money saved because of the moratorium to increase its community and take part within the 5G public sale as an alternative of repaying the debt, in its first media interplay because the authorities launched a reduction package deal for the sector on September 15. Instructed.
Takkar stated the federal government has addressed all issues of potential traders, which is able to assist the cash-strapped telecom firm full the fundraising course of on the earliest. Nevertheless, the sale of property like fiber and information facilities is now not a precedence, he added.
‘Fundraising again the originator’
“There isn’t any doubt that this firm will survive and never solely survive, it would carry out effectively and in addition compete available in the market,” Takkar informed reporters.
Shares of the telco fell 3.9% to shut at Rs 10.39 on the BSE on Wednesday.
Takkar stated the promoters of Vodafone Concept – UK’s Vodafone Group Plc and Aditya Birla Group (ABG) – have at all times been supportive of the telco and can also take part within the upcoming fundraising.
He stated each the promoters have at all times supported the fundraising initiative even at the price of dilution of their stake and that is anticipated to proceed.
After the reduction package deal, he urged the banks to take a recent take a look at Vodafone Concept and roll again the telco’s enlargement efforts because the uncertainty looms massive.
The package deal consists of fee moratorium and lowered financial institution assure (BG). Telcos, at any level of time, have BGs value round Rs 23,000-25,000 crore with DoT.
“We anticipate that there will likely be motion for us at each ends – one, there ought to be enchancment in pricing and all ought to be taken systematically. Then, the investments we plan to make are in our protection, buyer expertise and many others. “This may change the combo for us as effectively and drive ARPU (common income per consumer) progress for us.”
Vodafone Concept is India’s solely loss-making non-public telco, saddled with a debt burden of Rs 1.9 lakh crore, which confronted warmth from competitors constructed up because the enterprise. On the identical time, it ought to proceed to spend on spectrum and community, which is affecting profitability.
The federal government stepped in with a reduction package deal for the sector as fears grew that the cash-starved operator could possibly be pushed out of business, failing to fulfill its fee obligations together with adjusted gross income (AGR) installments and financial institution mortgage repayments. hopeless at. This might have turned the Indian market right into a private-player monopoly with state-owned BSNL.
The federal government additionally introduced a four-year moratorium on AGR and spectrum funds, a transfer that, analysts stated, permits Vodafone Concept to defer cumulative funds of round Rs 1 lakh crore – round Rs 24,000-25,000 crore yearly. – In 4 years.
Takkar declined to touch upon the quantum of the money reduction, saying he was ready for the federal government to calculate, and stated the Heart has made it clear that it doesn’t need a monopoly or monopoly within the sector.
Different essential parts of the package deal embrace an choice for telecom operators to transform the curiosity quantity into authorities fairness on deferred funds. The Heart additionally has the choice to transform the operators’ dues into fairness on account of deferred fee on the finish of the moratorium interval, tips for which will likely be finalized by the finance ministry.
“On curiosity conversion, we will likely be extra open to transform to fairness based mostly on board approval and tips. We have to see and perceive the phrases,” Takkar stated.
Aditya Birla Group and Vodafone Group personal 27.66% and 44.39% of the telco respectively. On the finish of June, it owed the federal government Rs 1.6 lakh crore.
On changing authorities dues into fairness after 4 years, Takkar stated the decision can wait.
“No want to fret about what is going to occur 4 years from now as a result of we do not know the place the corporate will likely be. However having that flexibility could be very useful,” he stated.
He stated although the federal government has no intention of operating one other telecom firm, allaying apprehensions that it could flip right into a state-run firm if India decides to transform the excellent principal quantity into fairness.
“They (the federal government) have informed us very clearly that you simply guys are consultants in operating, they need us to run,” Takkar stated.
The MD stated that he now plans to return to the corporate board with the newest updates. When requested whether or not the fundraising plan stays at Rs 25,000 crore or will be prolonged, Takkar was non-committal.
“I can not say roughly however we’ve to replace our plans and take it again to the board,” he stated.
Vi, which had pressed for flooring tariffs like its rivals, won’t shrink back from being the primary to hike tariffs and expects its ARPU to succeed in Rs 200 first and Rs 300 ultimately.
“Now with this package deal and the message of help to the business from the federal government, it creates an setting that pricing could begin to rise in some natural approach,” Takkar stated.