I think, for new investors, it would be better to enter only after AGR issue is resolved and anyways defensive investors would not invest in current scenario or performance, but think about these things–
The stock has beaten down very badly and from my perspective, it has factored in most of the bad news.
Current price has also factored in that VIL would get reasonable time for the AGR payment.
The bottom of price war might have been over as all telcos increased the price in December. Earning visibility is there now.
Indus tower deal is going to help, but it totally depends on AGR verdict.
Hence, I think there is high chance of VIL surviving all the problems and once it does, it could double or triple its value.
If one thinks-- VIL is not going to survive, then they should stay away else the small investment in it could be a smart idea.
Hi. Can you please share the souce for ‘Dues worth Rs 27,121 crore up for repayment in FY21; amount is more than 3x the FY20 cash flow from operations’ ?
The Bombay high court (HC) last Friday directed the income tax (I-T) department to refund Rs 833 crore to Vodafone Idea Limited within two weeks while upholding the telco’s plea.
Earlier, Vodafone Idea had filed a petition seeking a direction to the I-T department to refund Rs 1009.43 crore, including Rs 833 crore on an immediate basis as the undisputed amount, while citing the tax authorities’ rectification order issued on May 28.
Was reading the latest result review released by Credit Suisse on VodaIdea.
Acc to them - VIL can manage their cashflow needs till FY22 mainly on account of a 2 year moratorium on deferred spectrum debt. CS believes that VIL may find it challenging to service AGR dues in case tenure for staggered payment is short (less than 10 years). Beyond FY22 (when annual spectrum debt repayment of Rs.157 bn resumes), CS believes the the companys viability remains under a cloud without strong operational improvement and significant equity infusion.
All the infra , clusters merging , team reorganisation due to merger , 92 % got done in March 20, and balance in June quarter . Branding getting better with better 4 G network . That should rationalise operations and see almost NIL customer defection in q2 .
India Ratings and Research on Wednesday also said that it believes the Covid-19 related lockdown has provided another strong fillip to the ongoing trend of 2G and 3G customers for telcos transitioning to 4G, driven by the needs of higher data download speed and limits.
“Overall, operational trends continued to improve for the telecom sector in Q4 FY20 with ARPUs (Average Revenue Per User) for Bharti, Vodafone-Idea and Reliance Jio rising 14%, 11 % and 2 %, respectively, quarter on quarter,” India Ratings said in the report.
Bharti Airtel’s 4G base has risen 57%, Voda-Idea by 31% and Jio’s by 26% as compared to the same period year-ago, it noted.
Just to keep fellow members updated on reports/rumors floating, on VodaIdea, on the weekend. This is not a recommendation and kindly do your own research before initiating positions.
“Idea Cellular
If one look at the total spectrum portfolio of VIL and its total worth and the expiry date and compare that with Airtel and Jio, then one will buy this at this cheap rate. This is where all the TV analysts and news paper stock analysts are hiding the big truth about VILs debt. Reason is simple...it is the instructions given to them by big sharks to accumulate this at low valuation. Once it is done the same analysts will ask people to buy in high prices. VIL is the market leader in holding highest quantities in 900, 1800, 2100 and 2500 MHz ranges. It holds 143, 178, 195, 370 mhz respectively in each band. Airtel and Jio have less spectrum than VIL. Most important thing is validity of VILs spectrum. Most of them has starts expiring from 2030 onwards only. Lot of them are expiring around 2035 to 2036. It has very less spectrum expiring in next 10 years. VIL can balance that without even renewing them thanks to the merger. So their 4G spectrum capex going to be very minimal in next 15 years compared to Jio and Airtel. But if you look at Jio which is using RCOMs spectrum in 800 MHz band and its own 800 MHz is expiring in 2021. It is almost 81.5 MHz 800 MHz band it needs to buy again in the auction this year. This band is costlier one. I just did a small computation using base price set for 800 MHz band in each circle and it gave me a total of Rs 27251 crore. Just imagine this is based on base price only and that to based on 2016 price. So now this will be more and it will have to pay more in the larger market circles. So I am expecting jio to spend around 40k crore minimum this year for its 4G spectrum only. Airtel also need to buy out around 52 MHz of 1800 MHz band which is expiring in 2021 and it might cost around 12 to 15k. It also need to buy some more extra 4g spectrum in few circles which is expiring in 2022 to 2024 and also need to add some more to support growing data demand. So I am expecting Airtel to spend around 20 to 30k crore minimum in this year auction. VIL will hardly spend anything in that auction due to its merger spectrum holdings. If you compare the debt level of each of these companies, then you will come to know who has better balance sheet. So just accumulate this for longterm which is what I am doing. Hold this for few years to get multi fold returns. Telecom is going to be the future. With only 3 companies and growing data and subscribers this will have immense growth in the coming years. Price war is almost over and it`s their turn to get back everything they gave it in the last few years for free. AGR is just a drama. That will continue that till it leads to set the floor prize for Tariff. Just do your own analysis and invest. Happy investing.”
I don’t know if I should write this here, but Vodafone Idea is actually quite desperate to add more money to the kitty. They are doing this since last few months by enabling/ activating value added services without customer consent for a large number of users. You can see this while reading Twitter feeds. All my near-and-dear ones - including those working with Vodafone have burnt their fingers with this (the amount of money is not much per month, but by the time you realize, it adds up and then refunds need some efforts.)
The Supreme Court on Tuesday allowed telecom operators 10 years to pay up dues related to adjusted gross revenue (AGR).Also SC directed telcos to make 10% upfront payment of their AGR dues,
The top court has also asked managing directors/chairmen of the telecom companies to submit personal guarantees within four weeks against the payment of AGR dues.
I have been testing my hypothesis on VI by observing the market for sometime. Note: I believe VI will stage a comeback.
The challenge first:
Debt (Loan + AGR dues) = ~1 Lakh crore
Huge shift of customer from VI to either Airtel or Jio
Reasons i am cautiously Bullish:
Re-branding - If you are not bullish in the market why spend money in re-branding ?
Promoters Holding- For last 6 quarters, the Promoter holding has stayed constant at ~72.05% 3. The Debt has gone down - Even though in last 1 year, the debt has gone down though the pile of debt continue to be a challenge, i believe it is slowly turning around 4. Sunshine sector - Not sure if i have used the term correctly here, but propelled by Pandemic, Internet and 4G is more like a commodity and you need it even more today. It’s like getting air or food. It’s becoming that important and obviously smartphone cells are not going down 5. Industry has already consolidated - We have already seen mass consolidation and it’s only 3 private players now. Airtel has backed the need to have more players, for their own reasons obviously. So no body wants VI to go bunk. Atleast not Airtel 6. Government Support & AGR relief - VI goes bunk in India is bad PR for the Govt. Something they can’t affor. India is planning big to be alternate supply chain to CHINA and FDI and Make in India and it goes on.
Reasons are many more, and i have the feeling VI is staging is comeback. What do you think ?
@kartiks It would be more appropriate to look at the company’s operational performance and keep these 1 off gains away.
On that, YoY, the company’s losses have increased from Rs5,788Cr to Rs6,229Cr.
On QoQ, yes, the losses have reduced from Rs6,537Cr to Rs6,286Cr.
However, I find the reduction in Marketing Costs surprising. Considering that Vi was a co-sponsor for IPL and major rebranding happened in the quarter, the Marketing Costs have dropped by 50% YoY.
Vodafone Idea appoints Sanjay Jolly as EVP of Technology, Hub Operations
“He is a seasoned professional and has diverse experience in heading large-scale customer operations, managing comprehensive network rollout and technology transformation programs,” the telco said in a Linkedin post.
what are options for Vodafone Idea now that SC has not agreed to the arithmetic errors of DOT’s AGR math (which would have reduced AGR dues considerably). some speculations:
Verizon buys out entire Vodafone UK stake and pumps in fresh funds to roll out their 5g network (as Verizon has settled their patent dispute with Huawei now, they can focus on 5g deployment).
VI becomes Verizon India. (the rebranding will eerily fit verizon).
Private equity players, Amazon (which is fighting Jio over Future Retail, so has some axe to grind) invest in it for big stakes.
any other non-chines foreign telco invests.
AIRTEL raises money to buy Vodafone UK stake. Idea also invests money via parent group. Bharti & Aditya Birla begin a new era of cooperation.
TRAI_September2021.pdf (612.0 KB)
Reliance lost around 2 crore subscribers, VI loss of subscribers at 10 lakhs and Airtel added around 2 lakhs for the month of September. VI has stabilized loss of subscribers for now .
Lately I have been hearing that VI has good plans which offer data rollover and other schemes like free data at night, rather than Jio & Airtel which has capping of data each day. (Jio is the cheapest anyway) Since number portability is an easy task nowadays does anyone think that VI has a chance if there’s a fund infusion from any big players.
