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VIL, which had about 280 million subscribers as of June, said that Vodafone and Idea brands will now be called ‘Vi’.
“A brand with its eyes set on the future, it is built for and around customers… The integration of two brands is a culmination of the largest telecom integration in the world,” VIL said in a statement communicating its new unified consumer brand identity and positioning through a virtual launch on Monday.
Elaborating on the new brand, Ravinder Takkar, MD and CEO, Vodafone Idea said, “Vodafone Idea came together as a merged entity two years ago. We have, since then focus on integrating two large networks, our people and processes.”
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“VIL is now leaner and agile, and the deployment of many principles of 5G architecture has helped us transform into a future-fit, digital network for the changing customer needs.
“The new brand launch signifies our desire to not just deliver, but delight our customers, stakeholders, communities, and our employees and signals our passion and commitment to be a Champion for Digital India,” Takkar added.
The announcement comes close on the heels of the Vodafone Idea board, last week, approving fund-raising plans of up to Rs 25,000 crore through a combination of equity and debt instruments, to keep the company afloat.
The upcoming fundraising will offer a lifeline to cash-strapped VIL, which has suffered massive losses, has been losing subscribers and Average Revenue Per User (ARPU), and faces outstanding Adjusted Gross revenue (AGR) dues of about Rs 50,000 crore.
In the recent past there have been reports suggesting that Verizon and Amazon may invest over USD 4 billion into the company, although Vodafone Idea itself clarified last week that while it constantly evaluates various opportunities as part of corporate strategy, there is no such proposal currently before the Board.
Earlier this month, the Supreme Court directed telecom operators to pay 10 percent of total AGR-related dues this year, and rest of the payments in 10 installments starting from the next fiscal year.
Fund infusion is critical for cash-strapped VIL, the third-largest operator in the fiercely-competitive Indian telecom market where Jio’s entry in 2016, with free calls and cheap data-pushed some rivals to exit, acquire, or merge to stay afloat.
Jio Platforms the unit that houses India’s youngest but largest telecom firm Jio and apps recently secured Rs 1,52,056 crore from 13 investors including Facebook, Google, General Atlantic, Intel Capital, and Qualcomm Ventures.
Notably, Vodafone Idea’s overall AGR dues stood at over Rs 58,000 crore, of which the company has paid Rs 7,854 crore to the Department of Telecom so far.
The statutory dues arose after the Supreme Court, in October last year, upheld the government’s position on including revenue from non-core businesses in calculating the annual AGR of telecom companies, a share of which is paid as license and spectrum fee to the exchequer.
VIL has been under severe financial pressure, and analysts had earlier cautioned that the company’s longer-term viability was under a cloud.
In December, Vodafone Idea Chairman Kumar Mangalam Birla had said VIL may have to shut if there is no relief on statutory dues.
The company had reported a staggering Rs 73,878 crore of net loss for the fiscal ended March 2020 – the highest ever by any Indian firm – after it provisioned for Supreme Court mandated statutory dues.
It reported a net loss to Rs 25,460 crore for the June quarter after making additional provisions to pay past statutory dues, and had, at that point, said its ability to continue as going concern hinges on the Supreme Court allowing more time to pay dues.
The apex court has rejected the demand for a 20-year time for telcos to clear a combined Rs 1.6 lakh crore in past dues but allowed the liability to be cleared in 10 years.
Besides payment of AGR dues, VIL’s fund-raising will be important given that 5G is on the horizon, and industry will require the firepower for making substantial investments into bidding for spectrum and network rollout.