While government relief (option of conversion of dues into equity) ensures the survival, the company needs to raise capital as early as possible to stay competitive, ICICI Securities said.
Axis Bank, HDFC AMC, Indian Energy Exchange, SBI Cards, Shriram Transport Finance, Steel Strips Wheels, and Zensar Technologies to announce results today.
Gross revenue down 10.8% to Rs 9,717 crore, EBITDA slips by same margin to Rs 3,816 crore
While the overall subscriber base has declined as a result of the tariff interventions, the 4G subscriber base remained resilient, says CEO Ravinder Takkar
Vodafone Idea continues to lose customers and in November its subscriber base shrank by 1.8 million
VIL also pointed out that a similar trend was seen when Indian telcos shifted from 3G to 4G in FY 2016
The question of what happens if the telco is unable to repay the government in four years remains unanswered
Equity dilution and discounted price of debt conversion has worried investors of Vodafone Idea and Tata Teleservices. Are these concerns warranted? How can they survive post conversion? Let's find out
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Significant rise in ARPU needed to ease debt worries
Telecom operators Vodafone Idea Ltd, Tata Teleservices Ltd and Tata Teleservices (Maharashtra) Ltd will not become PSUs after their interest payable on dues are converted into government equity
Takkar reiterated that the company's existing promoters and management will continue to be in charge of the company. There will be no government nominees on the board either.
Govt should aim to move out of Vodafone Idea quickly
The slew of reforms announced by the government have helped assuage investor concerns in the sector, and Vodafone Idea expects to continue its fundraising plans, VIL CEO Ravinder Takkar said.
The government will own 35.8 per cent in the financially-stressed firm that has agreed to convert interest on deferred statutory dues.
On Tuesday, the stock of the telecom services provider had tanked 21 per cent to Rs 11.80 after the company said it agreed to convert interest on deferred statutory dues into equity.
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A top executive at a private bank said the money that was going towards paying government dues would stay in the books and should be used for loan payment