On the eve of a likely infusion of equity that Vodafone Idea CEO Ravinder Takkar is confident of securing, BusinessLine spoke to him to discuss what lies ahead for the telco, which has seen major troubles in the past few years. Takkar discussed Vi’s journey after the merger as well as what lies ahead for the company. Excerpts

Q

Tell us how you managed the Vodafone-Idea merger, and how you overcame challenges?

There is no silver bullet, to be honest, I cannot say I did this and overcame challenges. I returned back to India in 2017, just before the merger was announced and took on the role of CEO in 2019. Therefore, I was no outsider that was thrown into this. This merger was a relentless battle on all sides, and it was not like we had to do one thing to overcome the situation. There were many occasions when, we as a company, were in a dire situation, and it genuinely brings focus and attention, which you might not get in less-turbulent circumstances. 

However, if you don’t know what you are doing, you need to know what the top priorities are and not be distracted. Communication with the team is also key, since they are the ones who will have to deliver. Generally, I have noticed that when people are in a tough situation, they will sequester themselves off. I made the decision early that I will be more communicative, and I was hosting monthly calls, town halls, and communicating overtime. On the face of bad news being written about us, instead of not talking about it, we communicated.

Q

You clearly believe there is a lot in store for Vodafone Idea; what should we look forward to?

Clearly, we have had many accomplishments over the past year, with a lot of external headwinds we have managed to overcome. Our network now is consistently ranked as the best in the country, and is providing 4G population coverage to a billion people. We have come a long way, and grand metrics are in the right direction. We are seeing three quarters of revenue growth, three quarters of ARPU growth and three quarters of 4G subscriber growth.

Q

Your capex is almost a quarter of what other telcos are spending on their network. So, how are you managing?

We could certainly use more capex, we want more capex; the fund-raising we are doing is primarily for additional capex. But this adversity that we are facing, where we have to check and recheck where every penny is going to go, shows surprisingly how much limited money can really stretch. What part of the network is important, not important, things that we would not have even thought about in the good times. We are keeping tabs of our capital expenditure on a weekly basis — that is the level of attention to detail that is needed. This has made us competitive as we are even with the limited capex. 

Q

What excites you about the future? 

We see in the longer term that the industry structure will be three large private players — this will be a perfect setup to provide consumer choices and at the same time it allows the industry to do well, too. If you look at digital services, we still have a long way to go in terms of smartphone penetration, 4G penetration, but even where we are right now, there is a lot that can be done in digital services. From entertainment consumption to enterprise services to healthcare, and we are at a very early stage here. There is a switch in the government’s view about the telecom industry in general, from being a cash cow for the government to an industry that is the accelerator for the entire economy. It seems subtle, but it is a major difference for promoters, you can push things in the right direction. In the long term, this is good for the industry, it is good for the country. 

From a technology perspective, 5G will be coming, 6G in the future; with all this runway, there is an ability for us to keep on delivering to the customers. Additionally, pricing in India has major scope of growth, especially as the country enjoys some of the lowest pricing in the world.

Q

All funds that you raised through promoters infusing additional equity do not make a dent on the nearly 1.98-lakh crore debt that you hold in your balance sheet. Is that a cause of concern?

If I look at my total debt, around 90 per cent of it is owed to the government in some form or the other. The government has communicated a very clear view to us, which is, do not worry about my debt. Right now, they have given us a moratorium of four years, the equity conversion option. Frankly, they have considered that if the situation is not fixed there is an opportunity for more things down the line — they have sort of left the door open. There is no point in saying what those things are since we don’t know what the situation will be in four years. The government has noted that they will do whatever needs to ensure that healthy competition remains in the sector. 

Q

The 25,000 crore of funding that you are set to raise through fund raise will it be sufficient?

We believe that it will be sufficient for our capex needs; in case there is additional fund raise that we need to do, it will be done.

Q

What do you think will be the first iterations of 5G services?

So, we are still at the early stages of 5G use cases development for individual customers. Enterprise 5G solutions have more promise, and have been deployed in some test format in some way or the other. It gives us an optimistic view in the longer term; how long it will take for them to develop is uncertain at the moment because it is a bit of an ecosystem play as well. I think 5G use cases are a developing story; I don’t think there is anything out there tomorrow that people are waiting for. 

Q

Will you be able to launch 5G services this year?

Having the latest 4G networks this year, with our network having 5G capabilities already, we find ourselves in a position to quickly deploy 5G services, should the need arise, and if it is the right thing to do.

Q

2G to 4G conversion in subscribers has slowed down significantly for the company. Is that a cause of concern?

The chip shortage and supply chain issues that smartphone makers are seeing is partly the reason deterring 2G customers to transition. Once that issue is resolved, you will see conversion rates pick up, we are not seeing saturation in 4G subscriber growth anytime soon.