Vodafone, Idea rebranded as Vi; tariff hike on cards

Vodafone Idea, India’s third largest mobile operator, on Monday announced rebranding of the Vodafone and Idea brands as ‘Vi’ (read as We), in a move aimed at attracting digital customers and hinted at tariff hike for prepaid and postpaid users, as it looks to increase the average revenue per user (Arpu) figures.

The rebranding by the company comes amid intense competition in the country's highlyindebted telecom sector.

“Everyone is selling below cost and the telco is not shy to take the first step,” Ravinder Takkar, MD and CEO at Vodafone Idea, said at a media briefing on Monday.

He also added that the telecom regulator would have to reconsider tariff charts.

Increased tariff rates will help the telco improve its Arpu, which is currently at Rs 114, compared to rivals Airtel’s Rs

157 and Jio’s Rs 140, Takkar pointed out.

According to analysts, higher Arpu will be an essential requirement for the company, with a net debt of Rs 1.7 lakh crore (including AGR liabilities) to service its annual cash obligations.

Vodafone Plc's Indian arm had merged with Idea Cellular in August

2018, but the telcos had since maintained two separate brands.

The new brand identity is an attempt to mount another challenge in the space that has seen Reliance Jio and Bharti Airtel strengthen over the past few quarters.

“The integration of two brands is a culmination of the largest telecom integration in the world,” Takkar said as he announced the rebranded entity. “It's time for a fresh start,” he said.

The board of Vodafone Idea had approved fundraising up to Rs 25,000 crore on September 4 to pay off the hefty dues owed to the government. It plans to raise up to Rs 15,000 crore through debentures and an equal amount by issuing shares and warrants.

Through the unified brand and a bigger bet on digital, Vodafone Idea now hopes to attract fresh subscribers.

The company's customer base dropped sharply to around 280 million at the end of June from 408 million at the time of its merger with Idea two years ago.

Vodafone Idea and Bharti Airtel had lost around 47 lakh wireless subscribers each in May 2020, according to the Telecom Authority of India data released in August.

Vodafone Idea is making efforts to keep its business running in India, after the Supreme Court (SC) gave telecom companies 10 years to pay adjusted gross revenue dues (AGR) dues.

Takkar said the 10 years granted to telcos by the SC to clear past statutory dues was "a good outcome."

Vodafone Idea owes slightly over Rs 50,000 crore to the Department of Telecommunications as AGR-related dues.

The SC asked telecom companies to make an upfront payment of 10 per cent of the balance AGR dues by March 31, 2021.