Nick Read, the CEO of Vodafone Group, on Monday announced a fresh start for its India operations with Idea using a brand new name – Vi (pronounced as "we").
The new branding marks the completion of Vodafone's merger with Idea as a unified company operating in India.
The network operator must pay the Indian government $6.8 billion in Adjusted Gross Revenue (AGR) dues accumulated over 20 years.
As of June 2020, the company has only been able to pay back $853 million of its total bill. AGR is a usage and licensing fee that telecom operators are charged by India's Department of Telecommunications. Recently, the Supreme Court alloted 10 years to network operators to repay their remaining debts.
Vodafone will now be working to mint as much money as possible. Vi customers are expected to shell out more money for once cheaply-priced call and data packs.
In a bid to raise funds, Vi has approved a plan to secure $3.4 billion to keep the financially stressed business afloat in the market. The firm will be trying to garner $2 billion by issuing equity shares along with unsecured non-convertible debentures up to the same amount via public offerings and private placements.
In addition, the UK-headquartered telco said it is likely to invest about an extra $8.7 billion, not as "fresh equity", but as part of the pre-merger agreement.
This plan is expected to bring financial relief to the telco, which in August reportedly axed about 1,500 employees from its offices across India to cut expenditures.
In November 2019, Nick Read the Global CEO of British telcom Vodafone said that the company’s future in India was in doubt, but with the fresh announcements, the company is seemingly ready to face the challenges.