Don't see inflation as challenge for tariff hike: Vi CEO Ravinder Takkar

Says subscriber churn post tariff hike last November not significant; effect of 20% hike has been absorbed in third and fourth quarter, helped Vi to register growth in revenue and ARPU

Vodafone Idea (Vi) management does not see inflation as an impediment for hiking mobile tariffs as it aims to grow its average revenue per user (ARPU) to Rs 200 in the short term.

Responding to an analyst query on tariff outlook and demand in a post result conference call, Vi managing director and CEO Ravinder Takkar said that telecom is an essential service and continues to be a small piece of overall consumer spend. He added that while there was a subscriber churn post tariff hike last November it was not significant. “I don’t see it as a challenge,” he said.

Takkar said the effect of 20 per cent tariff hike has been absorbed in  the third and fourth quarter and that helped Vi to register growth in revenue and ARPU.  Vi’s revenue and ARPU saw 5.4 per cent and 7.5 per cent sequential growth in fourth quarter FY 22.

Takkar said the company will continue to make focused investments to improve its network and improve its 4G coverage. The company spent around Rs 4500 crore in capex last fiscal.  It expects the capex spend to increase this year with fresh fund infusion. The management however did not give specific capex guidance. Takkar said the company’s engagement with customers is high and it is incorrect to conclude that lower data or call volume is due to lack of engagement between the company and its customers.

Vi’s promoters Vodafone Group Plc and Aditya Birla group have pumped Rs 4500 crore equity in the company. The promoter stake which is currently at 74.99 per cent would reduce to 50 per cent after issuance of 33 per cent stake to government.

Talks with investors and banks for additional funds continue and the company expects to repay around Rs 8160 crore of debt in the next twelve months.

The company’s chief financial officer Akshaya Moondra said that loans would be repaid through internal accruals and cash margin that is being released following return of bank guarantees.