Vodafone Idea’s total debt stood at Rs 2.23 lakh crore in February. In February, the Indian government converted nearly $2 billion of its outstanding debt into equity.
The government had approved a bailout package for debt-ridden telecom companies in 2021. It was a package that helped companies convert interest on gross revenue owed to the government into equity.
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There are indications that Vodafone Idea’s future is not so secure and it is facing severe crisis due to the challenge due to high competition. With inflation above the RBI’s estimate, telecom companies are expected to start increasing tariffs only after the June 2024 general elections.
Vi will not be able to sustain the necessary investments and launch 5G services as the rate cannot be raised, leading to loss of subscribers. Raising capital will also be difficult, points out Kotak Institutional Equities. In the telecom sector, where Reliance Jio and Bharti Airtel are witnessing fierce competition, there is a question as to what will be the future of Vodafone Idea.