Tue Sep 24 10:52:46 UTC 2024: ## Vodafone Idea Struggles Amidst AGR Debt, But Hopes for Revival Remain

**New Delhi:** Vodafone Idea (Vi), India’s struggling telecom operator, faces mounting challenges, including a massive Rs 2.09 lakh crore payment obligation to the government for deferred spectrum and AGR liabilities. The company’s shares have plummeted following the Supreme Court’s rejection of curative petitions related to AGR dues, sending them to a 52-week low last week.

Despite this setback, Vi remains optimistic about its long-term survival. Company officials insist that the Supreme Court verdict won’t affect their business plan, which includes a substantial Rs 55,000 crore three-year capital expenditure plan focused on expanding 4G coverage, launching 5G in key markets, and increasing network capacity.

However, Vi is grappling with a declining subscriber base, partly attributed to network constraints. The company lost 2.5 million subscribers in the April-June quarter, leaving them with 210.1 million users.

To combat this, Vi is seeking a major network upgrade. They recently awarded contracts worth Rs 30,000 crore for network equipment, a move that investors welcomed, causing the stock to jump by over 11% on Monday.

The company is also in talks with lenders to raise Rs 25,000 crore in term loans and Rs 10,000 crore in non-fund based loans. They hope these funds, along with the recently raised Rs 24,000 crore, will help them improve network quality and attract subscribers.

While Vi’s CEO Akshaya Moondra believes that the network investment will eventually curb subscriber churn, analysts remain cautious. They highlight the need for multiple substantial tariff hikes to boost average revenue per user (ARPU) and meet their payment obligations.

Financial experts like Dayanand Mittal of JM Financial Institutional Securities acknowledge that the company’s recent fundraising ensures medium-term sustainability but emphasize the need for significant government relief and sustained investment for long-term viability.

Vi’s journey towards recovery is fraught with challenges, but their commitment to network improvements and fundraising efforts offer a glimmer of hope for the struggling operator. Only time will tell if these efforts will be enough to turn the tide and secure a brighter future for Vodafone Idea.

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