Vodafone Idea rebrands itself as Vi to gain lost ground and raise $3bn

Vi Vodafone Idea
Vi image courtesy Vodafone Idea

Debt-ridden Vodafone Idea has kicked off a new rebranding exercise in India and is looking to make a comeback by acquiring customers under the new brand name, Vi (pronounced We), after receiving a relief from the country’s Supreme Court in the outstanding adjusted gross revenue (AGR) dues case.

Vodafone Idea said it has its eyes set on the future under the new brand identity, suggesting that it will make efforts to sustain in the highly competitive Indian telecom industry.

Chief executive officer and managing director Ravinder Takkar said that Vodafone Idea is happy with the outcome of the AGR case and it will allow the company to plan its journey for the next ten years. 

“Actually we are very thankful to the court for allowing us payment over this 10-year period. We believe that this is an important step for us and I think it will be very useful for us when we plan our journey for the next ten years.” 

India’s Supreme Court last week gave partial relief to telecom operators like Vodafone Idea and Bharti Airtel and has ordered them to pay 10% of AGR liabilities by March 31, 2021 and pay the remaining amount in 10 instalments starting March 31, 2022.  The telco had requested a 15 years time-frame to clear AGR-related dues.

On new brand identity launch, Takkar said that the brand integration marks the completion of the largest telecom merger in the world. “VIL is now leaner and agile, and the deployment of many principles of 5G architecture has helped us transform into a future-fit, digital network for the changing customer needs.”

The telco said that it is ready to increase tariffs and has urged India’s telecom regulator, Trai, to intervene and look at the existing tariff regime, which the telco said is unsustainable. 

Takkar said that telecom services tariffs should go up in India, and Vodafone Idea is ready to take the first step. He added that every single telecom operator in India is selling services  “below cost” and the telco is “not shy to take that step (raising prices)”. 

Vodafone Idea’s board has also approved raising up to Rs 25,000 crore ($3.38 billion) through a mix of equity and debt instruments from domestic as well as foreign investors in one or more tranches. The fundraiser will be used to pay AGR dues and invest in network operations to win customers and better compete with Airtel and Reliance Jio.

“…Rs 25,000 crore which the telecom carrier plans to raise is sufficient for our business plan which we have submitted to our board and which they have approved and we look forward to exploring all options as a company.”

Takkar also said that Vodafone Idea has support from both the promoters – UK’s Vodafone Group and India’s Aditya Birla Group.

“We have support from both the promoters. They continue to, all the time I must say, give us support. We have no reason to believe that any of that support is going to change or come down in the near future or ever at all,” he added.

Interestingly, Vodafone Group separately told Indian media that its position has not changed on infusing new equity into Vodafone idea. “Vodafone Group does not intend to put any new equity into Vodafone Idea,” it said.

Vodafone Group, however, is likely to infuse around Rs 6,600 crore ($891.89 million) as per pre-agreed merger terms, having already put in over Rs1,800 crore ($243.24 million) under this arrangement.

Vodafone Group CEO Nick Read said that the launch of a new unified business under the unified brand, Vi, is an important step by Vodafone Idea. 

“…the integration of its 2G, 3G and 4G network, the unified brand is committed to providing a superior network experience, better customer services and leading products and services. citizens and businesses in India. Vi’s focus will be to deliver to citizens and businesses in India a superior network experience, better customer service and leading products and services.” Read said in a joint statement. 

“With our new brand – Vi, we stand committed to partner the Government to accelerate India’s progression towards a digital economy, enabling millions of citizens to connect to the digital revolution and build a better tomorrow,” Kumar Mangalam Birla, Chairman – Aditya Birla Group & Vodafone Idea Limited said in a statement. 

Vodafone Idea said that since the announcement of the merger in 2018, the telco has more than doubled its 4G coverage since merger to cover a billion Indians. It has completed radio network integration in 19 circles with 93% districts of the country covered. 

During the network integration process, Vodafone Idea de-duplicated 97, 000 sites in India and said that the size of de-duplication was as big as all networks combined of any large European country.

The telco said that it re-farmed large spectrum portfolio to create huge network capacity and said that most of 1846 Mhz spectrum is being used for four services. 

Vodafone Idea claimed that it has re-engineered its network with 5G-ready technology elements to double data capacity since the merger. It has also deployed Open RAN technology in various circles along with 12,000 massive mimo sites in India. 

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