What’s in store for Vodafone Idea?

The third-largest telecom provider in India, Vodafone Idea (Vi), has been the buzz of the town for several reasons. However, the root of all of these issues is the telco’s failure to increase funding and expand corporate activities. Although the company’s CEO does not see any drawbacks in postponing the launch of 5G, Airtel and Jio would significantly benefit from doing it first because they can market it to attract high-paying customers in the near term.

Vodafone Idea is currently short on both liquid capital and investor confidence. If the telco wishes to make a significant recovery, there are just so many things that have to go right. There is no need to be concerned about the telecom going out of business; it won’t happen. However, the real concern is how long it will take for things to turn around if losses continue. While the average revenue per user (ARPU) and quarterly revenues are both increasing, subscriber churn is also rising. Vi is simply not adding 4G subscribers at a fast enough rate to have any beneficial effects on the business.

Apart from 5G, the telco still has a lot of work to do, such as expanding 4G, delivering Wi-Fi to additional areas, recruiting new investors, paying off debt to banks and tower firms, and persuading the government to turn dues into stock. For the telecom to even be viewed as a serious rival to the other two private players, all of this must take place.

The telco is speeding up hiring and spending money on marketing initiatives, but those actions won’t completely cure the issue. Vi is in a very difficult situation, and the company’s management has been under pressure for several years.

The postpaid options were also updated by Vodafone Idea with the introduction of new Vi Max plans, which also include a new REDX package with perks for foreign travel and unlimited internet.

The telco needs to choose its objectives and think strategically; 5G is not one of them at the moment, sadly. Vodafone Idea must begin to produce free cash flow. Although it won’t happen immediately, turning things over will require the management to use the proper procedure and strategy.