Vodafone Ideas ( Vi ) shares fell 2.13% in early trading on Wednesday. At the time of writing, the telco’s shares are trading at Rs 6.90, a negative of 2.13% from the previous close of Rs 7.05. That’s a 52-week low for Vodafone Idea shares. The telco is unable to raise money and move forward with its business plans. For days, Vi’s shares have been trading around Rs 7. But on Wednesday, shares hit a 52-week low, meaning more damage for the telco.
Vodafone Idea has been waiting for the Indian government to convert its dues into equity for more than a year now. The government’s position is that until Vi’s promoters inject meaningful capital into the company, it will not go ahead with the share conversion. Show plans to roll out 5G are also on hold, as the telco does not have the money to place commercial orders.
Read more – Vodafone Idea claims 2x faster speeds for customers, but will it make a difference
Vodafone idea is likely to use fresh funds to service old debt
Most of what We will make will go towards settling debts and charges to lenders and sellers. This is because if We default on payments, it can be withdrawn in the bankruptcy court. This is one of the biggest concerns for lenders to issue new loans. The fresh loans were just to be used to service the old loans, and the ball would not move forward at all.
We need its promoters to come through as soon as possible. Vodafone UK, the largest promoter of Vi, is reportedly looking to sell its remaining stake in Indus Towers and use the proceeds to help Vi. Bharti Airtel has said it would waive the right of first refusal if Vodafone wants to sell a stake in Indus Towers to inject the proceeds into Vi.
Read more – Vodafone Idea Gifting Free data for users without Active Plan is not good
What do we do for customers?
Vodafone Idea’s subscriber churn has been quite high in the previous quarter, and the telco’s average revenue per user (ARPU) per month is also super low compared to its competitors. For retail customers, the telco is trying to improve the network speed experience with 4G. Just a few days ago, Vi said its 4G network is delivering 2x speed to customers in Andhra Pradesh & Telangana after increasing capacity by deploying additional spectrum.
We have previously claimed the same for customers in other circles. But the telecommunications company has not really been able to show what it has gained by improving speeds for customers. For Vi, stopping subscriber churn and increasing ARPU should be the two focus areas.