Will The Real Owner Of Vodafone Idea Please Stand Up!

Vi's woes will not end till government realises it is the "beneficial owner" and not the company's promoter

- V. KESHAVDEV

It was in April 2021 that Bharti Airtel chairman Sunil Mittal commented that the telecom industry was a two-and-half-player market with one operator increasingly becoming a "question mark". It's been two years since and Vodafone Idea - the "half" player Mittal was hinting at is now down to a near quarter of a player! While Bharti Airtel's revenue in FY23 was ₹1.39 lakh crore with a profit of ₹8,346 crore, Vodafone Idea (Vi) managed ₹42,177 crore with a loss of ₹29,301 crore. In comparison, disruptor Reliance Jio is sitting pretty with ₹90,786 crore in topline and ₹18,207 crore in profit.

With every passing quarter, the Indian telecom market is hastening its journey towards duopoly. As of February 2023, Jio maintained its supremacy with 427.1 million subscribers compared with Airtel’s 369.8 million. In contrast, Vi’s user base has shrunk to 237.9 million. Together, Airtel and Jio now control 69.78% of the country’s subscriber base of 1,141.9 million. Ever since the ill-fated merger in 2018, Vi has been ceding ground to rivals amid a record consecutive 18-quarter loss even as its debt has piled up to over ₹2.2 lakh crore. The irony is, post-merger, Vi had emerged as the largest operator with 408 million subscribers and over 32% revenue market share. The rapid decline in user base and the inability to increase the average revenue per user (ARPU) have resulted in a negative net worth of ₹84,405 crore. The latest capital infusion — conversion of the interest on adjusted gross revenue (AGR) dues into equity by the Centre — has not translated into tangible cash for Vi. On the contrary, the conversion has further bloated its capital base.

Telecom Guzzles Cash