IT WAS in April 2021 that Bharti Airtel chairman Sunil Mittal commented that the telecom industry was a two-and-half player market with one operator increasingly becoming a “question mark”. It’s been two years since and Vodafone Idea — the “half” player Mittal was hinting at — is now down to a near quarter of a player! While Bharti Airtel’s revenue in FY23 was ₹1.39 lakh crore with a profit of ₹8,346 crore, Vodafone Idea (Vi) managed ₹42,177 crore with a loss of ₹29,301 crore. In comparison, disruptor Reliance Jio is sitting pretty with ₹90,786 crore in topline and ₹18,207 crore in profit.

With every passing quarter, the Indian telecom market is hastening its journey towards duopoly. As of February 2023, Jio maintained its supremacy with 427.1 million subscribers compared with Airtel’s 369.8 million. In contrast, Vi’s user base has shrunk to 237.9 million. Together, Airtel and Jio now control 69.78% of the country’s subscriber base of 1,141.9 million. Ever since the ill-fated merger in 2018, Vi has been ceding ground to rivals amid a record consecutive 18-quarter loss even as its debt has piled up to over ₹2.2 lakh crore. The irony is, post-merger, Vi had emerged as the largest operator with 408 million subscribers and over 32% revenue market share. The rapid decline in user base and the inability to increase the average revenue per user (ARPU) have resulted in a negative net worth of ₹84,405 crore. The latest capital infusion — conversion of the interest on adjusted gross revenue (AGR) dues into equity by the Centre — has not translated into tangible cash for Vi. On the contrary, the conversion has further bloated its capital base.

Telecom Guzzles Cash

Since 2018, Vi’s equity capital has expanded 11 times from ₹4,360 crore to ₹48,680 crore. It will expand further in case tower infra provider, ATC, chooses to convert its ₹1,600 crore optionally convertible debentures. Incidentally, no other Aditya Birla Group business has a capital base as large as Vi. The combined capital base of the group’s prominent businesses was ₹13,531 crore (FY22) and, if one were to consider just the proportionate stake of the Birla family, it will reduce further!

Vi shareholders

The Brief: Will The Real Owner Of Vodafone Idea Please Stand Up!