Vodafone Idea won’t fight shy of spearheading tariff hike: Ravinder Takkar
Vodafone Idea will not shy away from taking the lead in hiking mobile tariffs and expects to complete fund raising within three months, the company management said in its post result conference call on Friday.
While the telecom company’s second quarter loss narrowed down to Rs 7,218 crore, its operational performance was weaker than its peers. The pending Rs 58,000 crore adjusted gross revenue (AGR) dues and refinancing of bank guarantees remain a major concern. Chief financial officer Akshaya Moondra said the company has so far received Rs 2,000 crore from Vodafone Plc and expects to receive another Rs 6,400 crore from its UK parent company in indemnity payments under the 2017 merger agreement. These receipts from Vodafone Plc are linked to AGR dues and the next instalment will be due in March 2022.
Telecom companies have repeatedly said that the current tariff levels are unsustainable and need to improve but have stepped back from increasing rates. On Friday Vodafone Idea’s managing director Ravinder Takkar said the company will not shy away frm taking the first step. “We have taken it before and we can take it again,” Takkar said and added that there were fairly strong indications that competitors would follow suit. In the first phase the average revenue per user (ARPU) of telecom compnies needs to increase to atleast Rs 200, he said.
A tariff hike will also help Vodafone Idea generate cash and cut down losses. While the company is focusing on 4G expansion and improving network, its average revenue per user (ARPU) is Rs 119 compared to Airtel’s Rs 162.
Takkar said the company’s fund raising plans are on track and that it expects to complete the process within three months. In September, the firm’s board approved plans to raise up to Rs 25,000 crore through a mix of debt and equity.
“We are in discussions with interested parties. Engagements are ongoing and progressing well,” Takkar added.
Responding to a query on impact of Reliance Jio’s post paid plans, Takkar said it is early days but there has been little or no impact on its existing post paid subscriber base. ” Postpaid subscribers tend to be sticky and less price sensitive. This has been a factor for a long time,” he added.