Vodafone Idea's Long Road To Recovery

Telco struggles to tide over financial crisis with tariffhike and equity capital.

- NEVIN JOHN AND ANUP JAYARAM

In early 2018, Vittorio Colao, former CEO, Vodafone Group plc, was chatting with an Indian industrialist at a coffee shop in London. The discussion switched to the financial condition of Vodafone in India. The industrialist says it was evident from Colao’s reaction that Vodafone had lost interest in India. It was around the time when the Cellular Operators Association of India (COAI), of which Vodafone was a member, slammed the Telecom Regulatory Authority of India (Trai) for a series of regulations which favoured new entrant Reliance Jio.

Vodafone Idea Ltd. (VIL) — the unified telecom entity formed in August 2018 between Vodafone Group plc and Kumar Mangalam Birla’s Idea Cellular Ltd.,—has had a despairing journey and recorded a cumulative loss of around ₹1.33 lakh crore over the last three fiscals. In the 2021 Fortune 500 listing of India’s largest companies, Vodafone Idea notched the highest losses at ₹44,233 crore. It has had a string of problems over the years, starting with the retrospective taxation case over the 2007 acquisition of a controlling stake in Hutchison Essar’s Indian assets internationally, the verdict over the repayment of adjusted gross revenue (AGR) dues and the slow roll-out of 4G services.

The waves of disruption forced the new CEO of Vodafone Group Plc, Nick Read, to announce that the company’s India unit could be headed for liquidation. Though he retracted the statement, Birla offered to hand over his 27% stake in the telecom company to government in August 2021.