AGR represents the revenue generated by telecom operators through their core services, such as mobile and internet services. Wireless operators have sought relief from the telecommunications ministry after the Supreme Court rejected the review petition of the telecom companies seeking corrections in the AGR calculations.

“Like any interested party, the lenders are also looking at what is happening in the AGR file… I and my promoters are in contact with the bank and we should be able to conclude a closing once some clarity emerges regarding this happening in the market. AGR,” Vodafone Idea CEO Akshaya Moondra said during the Q2 earnings conference call on Thursday.

He also said that any reduction in AGR’s liability was not part of Vodafone Idea’s business plan submitted to the banks, based on which the Techno-Economic Assessment (TEV) was carried out by an external agency and submitted at the bank.

“The government continues to unequivocally support the three private market players and we are engaged with them to find a solution,” he added.

Bank guarantees

On the question of the waiver of bank guarantees of ₹For an amount of 24,500 crore, Moondra said it had requested the government to remove the need to submit bank guarantees for previous auctions, as has been done for auctions since 2022.

Seeking bank guarantees reduced its ability to take on debt since banks were unwilling to offer those guarantees, Moondra said. “It is very clear that the bank guarantee is something that the banks themselves will not be very willing to offer. They’re trying to get debt financing, which will be used to make investments (and)… improve our performance and then improve our cash generation. Bank guarantees will not have this result. »

Moondra added that the company had cash reserves of approximately ₹13,600 crores, which was sufficient to execute the planned investments of ₹8,000 crore for the second half of the financial year. Carrier No. 3 has planned a total investment of ₹55,000 crore for three years, which includes ₹$24,000 was raised from the markets earlier this year through the largest FPO.

While the moratorium on payment for frequencies purchased at auction in 2022 ends in September 2025, it must pay ₹27,230 crore as first installment from October 2025 to March 2026. Moondra said the option of converting dues into equity remained with the company as it was part of the reforms program announced in 2021. It would have time until ‘at the end of the moratorium to reduce these expenses and, in the event of a cash deficit, the amount owed to the government can be converted into equity, he said.

Increase prices

The CEO said the scope to increase fares at entry levels remained less, meaning future fare hikes would occur at the upper segment, reiterating the need for fare rationalization to recover the cost of capital. “Customers who use more (data) should pay more so that telcos who invest in networks can get an adequate return on capital employed.”

Moondra said the operator’s recent price hike contributed to the increase in average revenue per user (Arpu) as well as revenue growth, but it will take a few quarters to see the full impact of this increase.

“Secondly, once 5G consumption increases and starts to be metered and billed, this in itself will provide the opportunity to charge for higher consumption. So this is a structural correction that will require the industry to think in the same way, but I think it is the need of the hour,” he added.

Private telecom operators have increased prices by 10-21% across all plans, leading to consolidation of SIM cards or customers with multiple connections keeping only one and ditching the others. VI lost 5.1 million subscribers due to increased transfers to an operator that did not increase its rates, Moondra said. As per the latest portability data till October, transfers to BSNL were down after August, he said.

Recovery from customer loss, he said, should occur by the end of the year.

Vodafone Idea’s losses narrowed to ₹7,175 crore in September quarter, down from ₹8,746 crore a year earlier, as revenue increased marginally ₹10,932 crores ₹10,716 million.

Average revenue per user (Arpu), a key profitability indicator, reached ₹166 of ₹142 a year ago and ₹154 in the previous quarter, due to the price increases executed in June and the real effect which was felt from the September quarter.