Vi share price: Vi’s debt funding plan could face more delay: CEO Akshaya Moondra

Vodafone Idea’s chief executive Akshaya Moondra has signalled that the telecom operator’s pending ₹25,000-crore debt funding – vital for its 4G and 5G plans – could face more delay as banks are demanding clarity on whether the government will offer relief on the adjusted gross revenue (AGR) dues front after the Supreme Court rejected the company’s curative petition.

At Vi’s fiscal second quarter earnings call Thursday, Moondra said while both he and Vi’s promoters are directly engaged with the telco’s lenders to conclude the targeted debt raise, the company is awaiting a response from the government on a potential solution to the AGR matter.

“Post-dismissal of our curative petition, banks want clarity on what’s happening on the AGR front…we are also waiting for some response from the government on whether there will be some relief or no relief,” Moondra said at the earnings call. “We remain engaged with the government and believe this needs to be addressed on the basis of fairness as there was significant merit in our curative petition.”

In September, the top court had rejected Vi’s curative petition seeking a re-computation of its AGR dues, which stood at ₹70,320 crore at the end of the fiscal second quarter.The telecom joint venture between UK’s Vodafone Plc and India’s Aditya Birla Group, though, said the government remained “very supportive and committed” on ensuring a telecom market structure with three competitive private carriers.

Till now, Vi has raised ₹24,000 crore via the equity route, but it needs to raise another ₹25,000 crore via loans and an additional ₹10,000 crore of non-fund-based facilities (primarily through letters of credit) to implement its ₹50,000-55,000 crore capex plans over the next three years to accelerate its 4G coverage and roll out 5G in its priority markets.

Beefing up 4G operations and rolling out 5G in key markets is vital for Vi’s competitiveness vis-a-vis bigger rivals Reliance Jio and Bharti Airtel, and also to stem customer losses.

During the call, Moondra attributed Vi’s heavy customer losses in the second quarter to many users porting out to state-run BSNL, which had not raised tariffs. “But the impact is reducing as the trend has been reversing quickly since August; but the BSNL impact will take some time to unwind,” said Moondra.

Vi’s CEO also indirectly conceded that the telco’s pending 5G rollout is weighing on customer data usage levels. Unlike 5G operators Reliance Jio and Bharti Airtel, who reported growth on this metric, Vi’s average data usage level fell sequentially in the second quarter. “A major reason is that as the number of people using 5G data on competitors’ networks is increasing, the consumption will be higher. Also for streaming, for the same kind of usage patterns, subscribers will see a higher level of (data) consumption on 5G,” said Moondra.

Vi, on its part, is looking to start 5G rollouts in key geographies by the fourth quarter of the current fiscal.

The leadership expects some course correction on the subscriber losses front to emerge by end-FY25, especially as it invests more aggressively in network expansion in H2FY25.