Vodafone India, owned by British company Vodafone Plc and Aditya Birla Group’s telecom arm Idea Cellular merged to become Vodafone Idea Limited last year. The merger was expected to generate Rs. 140 billion annual synergy, however due to competition, Vodafone started losing lakhs of subscribers every month, and the losses keep mounting. Now a new report from IANS says that Vodafone is in talks to exit from the Indian market.
According to reports, Vodafone is ready to “pack up and leave any day now.” This could be due to the mounting operational losses and declining market capitalisation which is adversely affecting the balance sheet of Vodafone Idea and hindering any fund-raising opportunities for the company. Further, the company is also losing lakhs of subscribers every month. Vodafone also reported massive losses in this recent financial quarter this year. The company’s stock market value has consistently been declining after the merger of Vodafone and Idea Cellular. It reported a net loss of Rs 4,067.01 crore in Q1 June 2019 compared with a net loss of Rs 2,757.60 crore in Q1 June 2018.
The company said that it continues to pay all its debts as per the schedule and has not approached any lender for debt recast. Further, it has called these reports “factually incorrect” and added that it continues to pay the debt as and when dues come. The financial stress on Vodafone Idea may worsen as the company has been ordered by the Supreme Court to pay about Rs 28,309 crore related to its AGR judgement. The company may file a review application on the court’s order if there’s any scope.