Vodafone Idea CEO Balesh Sharma is under no illusion that better customer experience is a big revenue earner. He promises better score on this front as he says there is a conscious choice for being the best in class. Sharma spoke to ETNow.
With this rights issue, would you expect to be fully funded for the foreseeable future, would there be any need for fund raising if planned asset monetisation does not work out?
You are right. The rights issue opens today for Rs 25,000 crore and it is open till April 24. Now, this gives us sufficient funding cover for our clearly stated strategy. As we have talked before to ETNow, our strategy is very clear with Vodafone-Idea Ltd — two very strong companies and two very strong networks coming together. Therefore, it's great infrastructure and two very strong brands.
However, the biggest priority for us is to integrate quickly so as to create more coverage and capacity, better customer experience and more profitability. Very clearly, on that direction, we are driving. This funding helps us fund ourselves sufficiently for that.
With this funding and other opportunities we have talked about, which is Indus Towers, our fibre monetisation and the cash generated from business give us sufficient cover for a long haul to be able to fund our business adequately.
News reports suggest that Indus Towers monetisation is also likely in the next 3-4 months. Could we see more fund mobilisation within this timeline?
Look, Indus Towers monetisation is going to take place around the completion of the merger of Bharti Infratel and Indus, which is likely as you said in coming months. When that happens, we have an option of taking stock in the new company or taking cash. We are looking forward to taking the cash and investing that into our business. So, it is well on track.
Give us a sense as to how much interest savings you are going to expect post this rights issue. Are the asset sale funds used to repay debt?
The rights issue helps us reducing the debt whether it is a DoT debt we are paying as instalments for spectrum and the interest thereon or the external debt. However, our real focus right now is to get the investments in to be able to move on our strategy for better customer experience and profitability.
Now in a recent interaction with us, you hinted that synergies are kicking in ahead of schedule. Could you give us a reworked savings that we can expect over the next say two years?
We had announced the merger, we said the merger integration is going to take us four years and therefore, we stated a synergy target and said this will happen in FY23. However, when we were waiting for merger approvals to come, we have spent that one and a half year meticulously planning every part of our business.
When we finished that blue printing related to retail, distribution, people, organisation, networks and the like in every geography, we realised that we can actually do it much quicker. We are now saying we will do it in two years instead of four, which means in FY21 we would already deliver the synergy targets and very confident of the last six months of progress.
This may not still be enough for the company to return to profitability. What measures are you taking to do that?
The funding in itself is obviously not going to change profitability. What is going to change profitability is utilising the strength that we have with the two companies coming together, putting it together to be able to very rapidly build better coverage and capacity for 4G.
When that happens, you know that this company Vodafone and Idea with the two brands we have already has 46 per cent share of the 2G market. The people who are not currently using data are sitting on 2G and they are sitting there for in one of my two networks.
If we have coverage and capacity and great customer experience, the chances are those customers will continue to be with our brand as they go from non-usage of data to some usage of data to unlimited usage of data. Therefore, our brands have an opportunity of taking the customer up the journey on data usage and therefore uplifting the ARPU of each customer. Now this happens as we roRead More – Source