Vodafone Idea's Recovery Strategy Amidst Financial Hurdles
Debt-laden Vodafone Idea reported a reduced loss of Rs 7,175.9 crore due to improved ARPU after tariff hikes. Despite subscriber losses, it plans further rate increases and significant investments in network capacity, including a $3.6 billion equipment deal. VIL negotiates with financial entities for debt relief.
- Country:
- India
Vodafone Idea, grappling with a hefty debt burden, has successfully narrowed its consolidated loss to Rs 7,175.9 crore for the September quarter, mainly due to an uptick in average revenue per user (ARPU) following a tariff raise in July. However, the increase has not been without consequence as the company saw a decline in its customer base.
In a bid to address the cost of capital, the CEO Akshya Moondra emphasized the necessity for yet another tariff hike. Concurrently, Vodafone Idea concluded a significant $3.6 billion deal with Nokia, Ericsson, and Samsung for network equipment supply, aimed at enhancing network capacity and alleviating subscriber loss.
With total liabilities exceeding Rs 2,22,470 crore, Vodaphone Idea is actively negotiating with banks and the government for relief on its financial obligations. This includes discussions to convert potential cash shortfalls into equity if necessary and the possibility of waivers on government dues.
(With inputs from agencies.)