Vodafone Idea Ltd. (VIL) said on Tuesday that the Center has to decide what to do about its stake in the company. The company has nothing in its hands in this regard. The company has said this amid reports that the government has possibly sought suggestions from some government funds to sell its stake in the telecom company. During the first quarter financial results of Vodafone Idea, Chief Executive Officer (CEO) Akshay Mundra said in a ‘conference call’ that some of the company’s customers are turning to BSNL since the tariff hike. The company is monitoring the situation.
The government is free to take its decision
However, he believes that given Vodafone Idea’s 4G coverage, quick decisions taken to ‘port out’ i.e. go to another company based on the tariff hike may not ultimately be sustainable. On media reports that the government is possibly exploring whether the public wealth fund would be interested in taking its stake in the company, Mundra said, “We have not had any discussions with the government on this. What we have to say is that as a public shareholder they are free to take a decision regarding their investment.”
The government is in favour of 3 private companies remaining
He said, “The reform package was announced with the objective of providing support to the company and the government has clearly been in favour of three private companies in the sector. Converting the outstanding amount into equity was a means to support the company’s books.” In response to a question about the ground level impact of the recent tariff hike, he said that although it is too early to draw a conclusion about this. But the fact is that this time the initial price increase has been minimal, so the rate of customers leaving the company should be low.
How was the company’s result
Vodafone Idea released its financial results on Monday. According to this, the debt-ridden telecom company’s net loss in the first quarter of the current financial year has come down to Rs 6,432.1 crore. The company’s loss has reduced due to the increase in the number of 4G customers. The company’s revenue in the June quarter fell by 1.3 percent on an annual basis to Rs 10,508.3 crore.
