Vodafone Idea, known as Vi, is a major Indian mobile network operator formed by the merger of Vodafone India and Idea Cellular in August 2018. As of September 2023, Vi boasts a subscriber base of 219.8 million, ranking as the third-largest telecom network in India and the 11th-largest globally.
During the recent investor meeting, Vi outlined its strategic plans. The company intends to use available cash for regular needs, decrease outstanding vendor balances, and invest in crucial capital expenditure (CAPEX). Furthermore, Vi plans to embark on additional CAPEX initiatives once new funding is secured. At the India Mobile Congress, the company showcased innovative products, including the “Sanchaar Shakti” IoT solution designed to enhance the efficiency of ports.
Vi’s future roadmap revolves around a focus on network investments. The company aims to upgrade non-4G sites to 4G, expand broadband coverage, and enhance capacity. Additionally, Vi is actively seeking external funding and anticipates progress in 5G rollout discussions and partnerships. The company remains optimistic about its position amid competitors’ 5G launches.
Vi’s brand “Vi” continues to gain traction, supported by a new campaign emphasizing emotional connections and inclusivity. The company has revamped its offerings, providing customers with more choices and personalized benefits spanning entertainment, food, travel, and mobile security. Vi is strategically working to increase the adoption of 4G and unlimited plans to improve the Average Revenue Per User (ARPU).
In the enterprise segment, Vi is making notable progress by expanding services beyond connectivity. The company has partnered with Yotta Data Services for data centre colocation and cloud services. Simultaneously, Vi is actively building a digital ecosystem through strategic partnerships, offering a diverse portfolio that includes music and video streaming, gaming, jobs, education, and digital advertising.
Vi reports a growing 4G subscriber base, marking the lowest quarterly decline since the merger. The company’s revenue witnessed a 0.6% improvement quarter-on-quarter, attributed to a better subscriber mix and 4G additions. Notably, the ARPU increased by 2.1% quarter-on-quarter.
Vi is currently evaluating the recent Supreme Court ruling on the tax methodology for revenue share license fees and has filed a curative petition in response. Regarding a stake sale in Indus, the company is exploring options, but decisions pertaining to Vodafone Group’s stake rest solely with the group itself.
Let’s assess and compare Vodafone Idea with its counterparts in the telecommunications industry.
| Operational Metrics | VODAFONE IDEA | BHARTI AIRTEL |
| Financials | ||
| 5 yr Average ROE | -211.85% | -9.92% |
| Price to Book | 0 | 7.69 |
| P/E | 0 | 78.9 |
| 5yr Average Interest Coverage Ratio | -1.19 | 0.44 |
| 5yr Avg ROCE | -5.27% | 7.57% |
| 5yr Avg Operating Profit Margin | 34.57% | 44.62% |
| 5 yr average Debt to Equity | 217.00% | 191.00% |
| 5yr CAGR Net Profit | 14.94% | 82.74% |
| Promoter Holding | 50.36% | 54.75% |
Average Revenue Per User (ARPU)
Source: Tijori Finance
Market Share
Source: Tijori Finance
The Telecom Disputes Settlement & Appellate Tribunal (TDSAT) has directed the Department of Telecommunications (DoT) to reconcile the surplus of Rs 755.52 crore it received from Vodafone Idea. This adjustment is to be made towards license fees and spectrum usage charges, relating to the amount collected during the merger of Vodafone India with Idea Cellular in 2018.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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