Vodafone Idea news: Good news from Trai on fund raise hindsight

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The decision by Aditya Birla Group-owned telco, Vodafone Idea’s board to raise Rs 45,000 crore has come at a time when there is some good news for the company from the  Telecom Regularity Authority of India (Trai). The Aditya Birla Group-owned telco has shown improvement in subscriber addition in the wireline segment in last few months. Although, the debt-laden teleco added fewer subscribers than larger peers Reliance Jio and Bharti Airtel. But even then, the recent subscriber addition has helped the crisis-ridden telco to at least keep its market share stable in the wireline segment of the telecom industry. Because of this reason, the debt-laden teleco has been able to thwart its market share from falling below two per cent in the relevant segment in last few months. This is an improvement from the point of view that in December 2022, the Kumar Mangalam Birla-owned teleco had 2.61 per cent of the wired telecom pie to its kitty. This kept falling since then and came down to 2.15 per cent in October 2023. Since then thanks to turnaround in subscriber addition, VI’s market share has not fallen rather has shown marginal improvement.

According to Trai, the cash-strapped teleco’s market share in wireline segment hinges on 2.17 per cent as of December 2023. So, finally, its market share has increased no matter even for 10 or 20 basis points. But, there is definitely an improvement.

Overall in the telecom industry, VI has 14 per cent market share as of December 2023.

Vodafone Idea board on Tuesday approved a fund-raise of up to Rs 20,000 crore through a combination of equity and equity-linked instruments. The crisis-ridden telco said promoters will also participate in the proposed equity raise. Overall, Vodafone Idea plans to raise around Rs 45,000 crore through a mix of equity and debt, the company has said.

“The equity and debt fundraising will enable the company to make investments towards significant expansion of 4G coverage, 5G network rollout and capacity expansion,” the release added. These investments will enable the company to improve its competitive positioning and offer an even better customer experience.