2024-11-14 20:29:02 :
NEW DELHI: The government’s clarification on the adjusted gross revenue (AGR) issue will boost Vodafone Idea Ltd’s efforts to raise debt from lenders, a Vodafone Idea Ltd executive said, adding that promoters as well as the management are working with Vodafone Idea Ltd Discuss banks raising funds $350 billion rupees.
AGR is the revenue earned by telecom operators from their core services such as mobile and internet services. Wireless carriers have asked the telecoms department for relief after the Supreme Court rejected the telcos’ review petition seeking to correct their AGR calculations.
“As any interested party, the lenders are also watching what happens on the AGR issue… My sponsors and I are engaging with the banks and once we have some clarity on the AGR issue we should be able to close the AGR,” Vodafone Idea CEO Akshaya Moondra said during a second-quarter earnings call on Thursday.
He also said that any reduction in AGR liabilities was not part of Vodafone Idea’s business plan submitted to the banks, under which the techno-economic evaluation (TEV) was completed by an external agency and submitted to the banks.
“The government remains unequivocally supportive of the three private markets and we are working with them to find solutions,” he added.
bank guarantee
Regarding the issue of giving up bank guarantee $Moondra said it has asked the government to cancel the requirement for a bank guarantee of Rs 24,500 crore for previous auctions, as it has done for auctions since 2022.
Mundra said seeking bank guarantees would reduce its ability to raise debt because banks are reluctant to provide guarantees. “It’s clear that the banks themselves are reluctant to provide bank guarantees. They are trying to obtain debt financing, which will be used to make investments (and) … help improve our performance and then improve our cash generation capabilities. Bank guarantees will not generate Such a result.”
Moondra added that the company’s cash reserves are approx. $13,600 crore, sufficient capital expenditure to execute the planned $8,000 crore in the second half of the current financial year. The third-largest operator plans total capital expenditures of $55,000 crore over three years, including $Earlier this year, it raised $24,000 from the market through its largest FPO.
While the moratorium on spectrum purchased in the 2022 auction is set to end in September 2025, it must be paid $27,230 crore as the first installment from October 2025 to March 2026. Moondra said the company retains the option of converting dues into equity as this is part of the reform package announced in 2021. Before the moratorium ends, companies will have time to reduce spending and amounts owed to the government can be converted into equity if cash is short, he said.
raise tariffs
The CEO said there was still less scope for entry-level tariff hikes, meaning future tariff hikes would occur at the higher end, and reiterated the need to rationalize tariffs to recover capital costs. “Customers who use more (data) should pay more so that telcos investing in the network can get an adequate return on capital.”
Moondra said the operator’s recent tariff hikes have helped improve average revenue per user (Arpu) as well as revenue growth, but it will take several quarters to witness the full impact of the hikes.
“Secondly, once 5G consumption increases and metering and charging starts, that in itself will provide some opportunities where higher consumption can lead to higher charges. So this is a structural adjustment that requires the industry to think in the same way, But I believe this is the need of the hour,” he added.
Private telecom operators have increased tariffs on various packages by 10-21%, leading to SIM merging or customers with multiple connections to keep only one and abandon the others. Moondra said VI lost 5.1 million subscribers as an operator that did not increase tariffs added rollout services. He said that BSNL’s porting volume is declining after August, as per the latest portability data till October.
Customer churn should begin by the end of the year, he said.
Vodafone Idea losses narrow to $7,175 crore in the September quarter, lower than $8,746 crore in the same period last year, revenue edged up to $10,932 Crores Rs. $10,716 Crores.
Average revenue per user (Arpu), a key profitability metric, rose to $166 from $142 a year ago $It was 154 in the previous quarter, driven by the real impact of the tariff hike implemented in June and taking effect from the September quarter.
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