Vodafone Idea Ltd
NSE:IDEA
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Good afternoon, ladies and gentlemen. This is Margaret, the moderator for your conference call. Welcome to the Vodafone Idea Limited Company. [Operator Instructions] We have with us today Mr. Ravinder Takkar, MD and CEO of Vodafone Idea Limited; and Mr. Akshaya Moondra, CFO of Vodafone Idea Limited, along with other key members of the senior management on this call. I want to thank the management team on behalf of all the participants for taking valuable time to be with us. Given that the senior management is on this conference call, participants are requested to focus on the key strategic and important questions to make sure that we make good use of the senior management's time. I must remind you that the discussions on today's call may contain forward-looking statements and must be viewed, therefore, in conjunction with the risks that the company faces. [Operator Instructions]Please note that this conference is being recorded. With this, I hand the conference call now over to Mr. Ravinder Takkar. Thank you, and over to you, sir.
Thank you, Margaret. On behalf of Vodafone Idea, I welcome all participants to this earnings call. On 30 June, our Board of Directors adopted the audited results for the quarter as well as the full financial year ending March 31, 2021. The detailed press release, quarterly report and audited financials have been uploaded on our website. I hope you have a chance to go through the same. As usual, I will start with discussing our ongoing strategic initiatives, along with operational highlights for the quarter. I will then hand over to Akshaya to share details of the company's financial performance. Before that, let me talk about the impact of the severe second wave of COVID that the country has grappled with over the last few months. It has been a difficult period for the Vodafone Idea family. Since the beginning of the pandemic, we have lost a few of our colleagues, while several others have been affected, and many of our colleagues have lost their near and dear ones. In these terrible times, as an organization, we have stayed true to our culture of care and have provided full medical support to every employee who had to be hospitalized or needed any medical assistance. We have extended financial support to offset cash flow difficulty for employees who had unfortunate situations in their families. Our insurance policies are providing industry-leading financial provisions in case of loss of life. The COVID war-rooms in every cluster headquarters that track, coordinate, support and connect with every employee, be it to ensure connecting with doctors, searching for oxygen cylinders, facilitating hospitalization or arranging for medication. Our external country partners offer support and strength to employees who have recovered from COVID or are in need of help to deal with the grief and their circumstances. Throughout this pandemic, our mobility service has formed the backbone of the digital infrastructure of the country. Our focus continues to be on delivering uninterrupted services and great end-user experience while ensuring safety of our employees and partners. I would like to thank all our employees, especially our network teams who have been working nonstop through the pandemic, providing critical support to our customers and communities. Our frontline teams have been working relentlessly in very difficult circumstances which were further aggravated the cyclones on both the West and the East Coast of the country. Our network engineers were indeed the true heroes, braving all odds to ensure network was up and running 24/7. There are scores of stories of our network warriors, such as our team installing the power overnight to a small village in Kerala, enabling 150 students to access online education or working on war footing for setting up equipment for enhanced connectivity in one of the biggest hospitals in Mumbai. Many of our teams traveled hundreds of kilometers to restore critical sites, delivered SIM cards at doorsteps or just set up services on a smartphone for a senior citizen at home. While this was a need of the hour, we also maintained that we do not do business while putting our people at risk. Therefore, each and every employee and associate who had to step out of their house was fully trained on our comprehensive COVID protocol and was provided adequate safety gear. We have also been arranging vaccination camps for our employees and their families. As a socially responsible corporate, we remain committed to helping the country to deal with the crisis in every possible way. During the stages of the pandemic, we have again extended support to our marginalized customers as we did during the first wave. We have provided benefits worth up to INR 2.9 billion to over 60 million low-income customers. We have also been prioritizing CSR support to alleviate or mitigate the impact of COVID. We plan to reach out to farmers, students, self-help group women, families and dependents where the sole breadwinner has lost their life due to COVID-19. We also proposed to facilitate vaccination drive in several places. Now moving on to our key strategic initiatives. The first one being focused network investments. We continue to follow our focused approach to investments poised towards our 16 priority circles which contribute over 94% of our revenue. This helps us in utilizing our CapEx effectively while ensuring that we continue to offer superior customer experience in these areas. We are progressively upgrading our 3G network to 4G. We closed over 30,000 3G sites during the year, while we added 43,500 4G FDD sites mainly through refarming of 2G or 3G spectrum. The process of refarming 3G spectrum to 4G on majority of sites in different cities have substantially enhanced the GIGAnet 4G capacity in those cities. Our overall broadband site count stood at around 453,000 compared to 436,000 a year ago. Our 4G coverage has crossed the benchmark of 1 billion Indians during the year. Our constant endeavor to be the best 4G network in the country is testified through top rankings across various third-party reports on both Data and Voice. Vi GIGAnet remains the fastest 4G network in the country for 3 competitive quarters in FY '21 as per Ookla. Based on TRAI's Mycall App data, we also had the best voice quality in the country for 6 months consecutively from November 2020 to April '21. This comes at a time when people and businesses are more reliant on telecom connectivity for their work, education and all other aspects of life. Our focus on providing superior customer experience is helping us drive stronger network perception. While we are currently in the middle of our 4G CapEx cycle, we have been deploying equip print, which is 5G-ready on both radio and core. We have the advantage of having the latest 4G equipment and technologies, which are capable of upgrade to 5G. Also, we have made substantial progress in deploying several 5G-ready technologies such as Massive MIMO, DSR, cloudification of core, et cetera, and they are very much central to our strategy for future growth. Recently, we have tested dynamic spectrum sharing as a feature between 4G and 5G with our existing 4G spectrum. We have also initiated 5G trials in our -- with our major network partners, Nokia and Ericsson, for the freshly allocated 5G spectrum in 2 cities, Pune and Gandhinagar. Moving on to market initiatives. In the post COVID world, the role of Internet has become more relevant and digital adoption and usage has significantly accelerated. With the need for data increasing, we launched and promoted Unlimited Night Data, a differentiated proposition wherein customers can enjoy unlimited data between midnight to 6 a.m. on unlimited tax above INR 249. We also launched Weekend Data Rollover, an exclusive proposition for Vi the customers to carry forward unused data from weekdays to weekends on unlimited tax above INR 249. We will continue to look at ways to improve ARPU by driving 4G UL plant penetration. We also aim to scale up proportion of high ARPU subscribers through large programs in conjunction with OEMs and NBFCs for 4G devices. That said, tariff hikes remain a critical source to revive this sector and ensure that operations make a reasonable return on their massive network and spectrum investments. Recently, all 3 operators have launched new plans without daily limit with lesser data bundles compared to the regular daily data plans. We believe these plans are a step in the right direction as pricing structure needs to correct, and we have the ability to sell data bundles which consumers can use any time and then pay more if they need additional data allowance. Now on Business Services. Business Services remain one of our key focus areas. As we continue to innovate and offer solutions in line with the changing requirements of the customers, our traditional fixed line data and voice offerings continue to see growth during this challenging period. Recently, we introduced Managed SIP services for businesses for whom voice calls are a key business resource. We are the first and only telecom operator to provide Managed SIP services in India. With new and emerging cloud and IoT services are central to our business services growth strategy. We continue to derive tremendous synergies from our relationship with Vodafone Group, who are a global leader in the IoT segment. We have further strengthened our IoT portfolio with the launch of Integrated IoT Solutions for enterprises. We are the only telecom company in India to offer a secure end-to-end IoT solution that comprises of connectivity, hardware, network, applications, analytics, security and support. The launch of our Integrated IoT Solution is a strategic step towards making Vi business an IoT ecosystem integrator for Indian enterprises and positioning us to have an ecosystem play driving our transformation from a telco to a techco. The pandemic has accelerated growth in digital ways of working for businesses and workloads are increasingly migrating to the cloud, leading to a rise in demand of reliable security solutions. We have strengthened our security portfolio with the launch of Vi Cloud Firewall, a cloud-deployed security solution for enterprises and businesses. In order to power hybrid workplaces and provide seamless digital experiences, we have launched Vi Business Plus, an industry-leading mobility solution, which enables today's businesses to strike the time balance between business objectives and employee mobility needs. Our enterprise digital platform for business and mobility has been recognized by global dealing at IMCG (sic) [ ICMG ] Global awards 2020 for having the best customer centricity and architectural design. Our next strategic initiative is driving partnerships and digital revenue streams. We continue to partner with content providers to promote new and engaging content through Vi Movies and TV. Our vast content library coupled with differentiated data benefits in the industry has led to a winning proposition. We have collaborated with Hungama to launch pay-for-view models for premiering digital films from Hollywood at onetime cost. We have also recently added Disney+ Hotstar to our extensive list of content partners further fortifying our highly competitive content portfolio. This collaboration aims to bring the best of video content to Indians across the 2 most popular genres of entertainment and cricket. This will give our customers access to IPL matches and other cricketing content throughout the year. We have also been entering into strategic partnerships with key players in the area of learning and upskilling, health and wellness and business help to offer benefits to the new age customers. The company has forged partnerships with several Internet first companies and plans to onboard the more partners under each of these areas to enable Vi users to get exclusive offers from these players. Health care being a priority, we have even provided free health insurance to our customers Aditya Birla Health Insurance. Our innovative and partnership-led content strategy has thus helped us adopt a telco-first approach for content monetization in this hugely untapped market. We will thus continue to focus our platform capabilities to offer a deeper integration with our partners for a differentiated experience, create monetization opportunities and truly become an integrated digital service provider.And lastly, we have made good progress on our cost optimization exercise. As you are aware, we targeted to achieve INR 40 billion of annualized OpEx savings by the end of this calendar year. As of this quarter, we have already achieved approximately 65% of the targeted annual cost savings. Moving on to operational highlights for the quarter. Revenue for the quarter was INR 96.1 billion, a decline of 11.8% quarter-on-quarter on account of IUC regime going away since January 1, 2021 a as well as due to fewer number of days in the quarter. The subscriber base was 267.8 million in Q4 FY '21, a decline of 2 million, similar to what we witnessed in Q3. However, we continue to see healthy traction in 4G UL net additions, which remain a focus area for us. At the end of the quarter, the 4G subscriber base stood at 113.9 million, an addition of 4.2 million 4G customers, highest ever in the last 5 quarters. Subscriber churn, however, increased to 3% compared to 2.3% a quarter ago due to increased market activity. Now a quick update on other developments. In the Spectrum Auction conducted in March 2021, we acquired 23.6 megahertz of spectrum across 900 and 1,800 megahertz band in 5 circles for total consideration of INR 19.93 billion. We have also optimized spectrum holding in some circles. With that, our spectrum footprint of 1,768 megahertz is very competitive and more than adequate to serve existing customers as well as add several million more. On the AGR matter, as you are aware, we have filed a modification application in the Supreme Court requesting them to allow the DoT to correct the manifest clerical arithmetic errors and computation of AGR demand, which is currently pending hearing. Further, we have informed DoT that we have paid more than 10% of the total views and complied with the Honorable Supreme Court order. We have also filed an affidavit of the Supreme Court confirming payment of 10% of the total dues with an undertaking to pay the arrears as per the court chaptered. On fundraising, we are currently in active discussions with potential investors.With that, I hand over to Akshaya, who will share the financial highlights for the quarter.
Thanks, Ravinder. A very good afternoon to participants from India, and a good morning or evening as applicable to overseas participants. Moving on to the financial highlights. Revenue for the quarter stood at INR 96.1 billion as against INR 108.9 billion in Q3 FY '21. After the quarter-on-quarter decline of 11.8%, 9.6% was on account of domestic IUC or mobile termination, abolishment effective January 1, 2021, and 2.2% was on account of lower number of days in the quarter. The average daily revenue adjusted for IUC was therefore flat quarter-on-quarter. Adjusted for Ind AS 116 impact, EBITDA was INR 21.7 billion for the quarter. There were one-offs of INR 4.5 billion in the quarter, primarily in network and IT costs. We continue to progress well on our cost optimization exercise to drive further savings and target to reduce our annual operating cost by at INR 40 billion over Q4 FY '20 baseline by the end of this calendar year. On a run rate basis, by the end of Q4 FY '21, we have achieved approximately 65% of our target cost savings. Q4 FY '21 CapEx stands at INR 15.4 billion, taking the full financial year CapEx to INR 41.5 billion. For the full financial year FY '21, revenue and EBITDA were INR 419.5 billion and INR 169.5 billion, respectively. Excluding IUC revenue, FY '21 revenue declined by 3.3% compared to FY '20. FY '21 EBITDA, excluding Ind AS 116 impact was INR 80.4 billion, a significant year-on-year improvement compared to INR 58.1 billion in FY '20. The improvement of INR 22.3 billion was despite the revenue decline and loss of margin on account of abolishment of domestic IUC, primarily due to several cost optimization initiatives undertaken by the company during the year. FY '21 EBITDA was also positively impacted by INR 8 billion compared to last year, due to the amortization of subscriber acquisition costs over the average expected customer life starting Q3 FY '21, based on updated estimates of customer life cycle. Also, this is in line with the general industry practice. On AGR, as Ravinder mentioned in his remarks, we have filed a modification application in the Supreme Court, requesting them to allow DoT to make corrections for manifest errors and DoT demands. As the matter is pending hearing, the AGR liability in our books is accounted for without considering any impact of corrections that may arise from the filed application. Resultantly, gross debt excluding lease liabilities as of March 31, 2021, was INR 1,803.1 billion, comprising of deferred spectrum payment obligations of INR 962.7 billion; AGR liability of INR 609.6 billion, that are due to the government and debt from banks and financial institutions of INR 230.8 billion; cash and cash equivalents of INR 3.5 billion; and net debt stood at INR 1,799.6 billion. With this, I hand over the call back to Margaret and open the floor for questions.
[Operator Instructions] The first question is from the line of Manish Ostwal from Nirmal Bang.
My question on the capital raise plans. So in your opinion, the lack of clarity on account of AGR modification is the key hurdle for not able to raise the funds. So what is your -- why we are so much of delay in the capital raise?
Okay. Manish, let me try to answer that question. The modification application is with the Supreme Court, we filed it. These are arithmetic errors and emissions. We are very confident that it is not the intent of the government DoT to make us pay for these with these type of errors. So we are very confident that the Supreme Court will allow the DoT to make adjustments based on those errors and emissions that were done in the first round of calculations of these AGR dues. I would say that while this is an important element of confirmation that we are looking for from Supreme Court, I do not believe that this is a very big hurdle today in the minds of investors who are engaging with us on fundraising as a key issue for fundraising within the company.
Sir, any time line for the capital raise you would like to highlight?
No, Manish, I would not like to speculate. All I can tell you is that we are in discussions. I can also confirm with you that there is -- that we have continued interest in investing in the telecom sector in the country. I think the biggest hurdle that you asked me, if you ask me is something that they always ask us, and we have also mentioned several times is that the overall industry is under stress because of the pricing situation in the industry. As soon as the pricing improves, I think this creates a significant amount of confidence not only in the industry players, but overall, it starts to show positive returns for the industry. And I think that is really what can drive a significant amount of investment, not only from new investors, but also from existing investors into the business. But I would not like perspective on the time frame.
The next question is from the line of Vivekanand S. from AMBIT Capital.
I have 3 questions. So one is -- thank you so much for the discussion on the market initiatives to drive ARPU. So elaborating further on the new tariff plans that were launched, what -- Ravinder, in your view, what is the road map to the market repair that we've been talking about, our competitors are also been talking about it for a while, and the role of the regulator there? That's question one. The second one is on the liquidity position. Right now, our cash balance is around INR 3.5 billion. But if you could highlight any potential tax refund or contingent assets and the timing that we expect these assets to fructify, that will be great. And lastly, in terms of your conversation with the government and the lenders in respect to the spectrum installment payment commencing from 9 April and of course, the next 12 months, the banks that they expect payments from you. Is there any progress on the dialogues there with respect to giving you more time til the market as happen?
Okay. Thank you, Vivek. Let me start by answering some of the questions, and then I will hand over to Akshaya for some of the ones which are -- he is in a better position to answer. Let me start with the first question that you had regarding the new tariff plans. I think as have been mentioned many times by myself as well as several of the industry players, but the biggest issue that is a problem in this sector today is the pricing. The pricing is much lower than it needs to be, whereas the consumption that our customers and overall, the citizens enjoy is significantly higher than what it used to be from some several years ago. Now I think how we move towards repairing that, we believe that there is -- there are several ways in which that can happen. One is in regards to floor pricing. This is, as you know, that all industry players jointly through COAI has written to the regulator to look at floor pricing as an option. And regulator has started consultation in terms of floor pricing, in which all representation was done, but there is a floor price that is needed within the country and within the industry. Now while we are still waiting for regulator to complete that consultation and come back with an answer which can hopefully help strengthen the returns in this industry and overall relief the stress in this industry, I think we believe that floor pricing remains the best and the most preferred way to fix this issue because it has been a challenge to do that for several years now. Also at the meantime, I think there are other ways in which improvements can be made. For example, somehow in our industry, the price plans that are mostly prevalent today are per day type of usage allowance that they provide, which means you either get 1 gigabyte or 1.5 or 2 or 3, depending on what bucket you want to get of gigabit today. Now this is a very strange model, one, because customer usage doesn't always work in that manner. People use a certain amount of data, some days they use more, some days they use less. But this recurring daily model does not make any sense. Secondly, if you look at the total amount of data that means you have given in a month is significantly higher than the actual usage for all 3 operators from a reported number of perspective, the usage of data versus fiber is below 20 gigabytes a month in that period, whereas even the basic plan, which is 1 GB a day obviously gives 28 GBs in that period. So it's a very strange thing that how do you actually move people up and customers up to a higher payment ladder. And we believe that the new plans that have been introduced in just recently, which offer a bucket of data which you can use during a period of time, 30 days, 60 days, 90 days. And you can use that any time, daytime, night time, weekends, weekdays, you can use it anytime during the day. And when we run out of that, you can buy more data, which I believe is the right architecture for price increase. So to summarize my answer, one, which is absolutely a tariff hike is needed. Floor pricing is the best way to implement that. But even when you do floor pricing, it needs to be done at the right price, although the architecture of the plans that have now been induced to be held in the right direction, and I think this is something that can drive positive momentum in the industry on the -- as far as the pricing is concerned. Let me answer your second -- to your third question regarding situations with the discussion with the government before I hand it over to Akshaya for his comments on liquidity and discussions with the banks. So on the government part. I think, we -- as you know, we are in our 2 years spectrum moratorium situation as a industry right now. The 2-year moratorium was granted by the government, basically because there was stress in the industry and there were challenges which were not allowing people to make those spectrum payments or operators to make a spectrum payment. So while that moratorium was a big relief, and some of the items that were causing stress in the industry like AGR have, to some extent, been addressed, although a little bit more work to be done, but broadly, the Supreme Court has ruled on it, which is good. But the other significant issues like pricing that I mentioned earlier, still continue to remain. So unless those big elements are not addressed, I think, in some ways, the stress will continue. And in that situation, I think it is only reasonable to say to the government that they have to provide an extension to the moratorium until these pricing-related issues and the stress in the industry and the sector is removed. And that's the request that we have made to the government. And I think it's reasonable under the current scenario that we are seeing. We are not the only ones who are saying they're stress in the industry, I think it's been vocally set by other players as well. And I think it's an important way that the government addresses it. And I think spectrum moratorium can be further increase until that stress is really relieved. Akshaya, I hand over to you for the liquidity question that was asked by Vivek.
Yes. Thanks, Ravinder. So Vivek, your question is that what are the assets which are available, which we could kind of convert to cash. So let's say, one is I think, as we've said from the beginning that at the time of merger, we had got tax refunds of about INR 83 billion. Out of that, till date have received about INR 15 billion, and there is another INR 68 billion to be received. We also have some GST export-related refunds where the refunds have just started coming in. It was just the first round of refunds. So to set that process that took some time. And then we also have some surplus land which was initially taken for data centers, which we are in the process of divesting. I think all in, these items combined together, we would say that we could possibly realized cash out of this in this financial year to the tune of about INR 30 billion.
All right. Just one small follow-up, Akshaya, thank you for the clarification. The Vodafone P&C contingent asset, which was linked to the AGR payment, how much of that is pending?
So the total cash payment, which Vodafone Group -- we rose the cap that we have explained earlier is INR 84 billion. In this financial year, they had paid about INR 20 billion. So there is INR 164 billion, which are to come. These are linked to payment and some of this also gets offset by the tax refund if they are received on behalf of Vodafone. So -- and the next settlement will be due in June '22. So it will ultimately depend on what is the payment that we have made for the AGR, is there any tax refund? But there will be a next settlement in June '22.
All right. And my last one was on the dialogue with banks for the loans that are payable over the next 12 months, even the current portion of the long-term loan.
So I think we are looking at first kind of the funding, which is, as we have said in the past, is more like debt or hybrid structure funding, which we are working on. I think we will engage with our lenders at a suitable time to see how they can support us in providing any new facilities. I think we just -- we are in constant engagement with them to explain them about what are our funding plans and all. In terms of whether they could support us with any further funding, that is a discussion, which I think is somewhat linked to the new funding that we are raising. And I think that discussion will happen at a suitable time.
The next question is from the line of Vishnu K. G. from JM Financial.
Just wanted to pick your brains on ARPU. So essentially, we had the last rounds tariff hikes in December '19, and we saw an ARPU increase in 4Q FY '20. So if I'm looking at your numbers, even if we adjust for the IUC revenue loss, the 4Q FY '21 ARPUs are actually slightly lower than the 4Q FY '20 ARPUs in spite of higher 4G users. So could you please explain why the mismatch is there? Is it because of some kind of revenue leakage in the bottom of the premium subscribers?
Akshaya, would you please take that?
Yes. So actually, no, there is no reduction or leakage. If you look at it, the ARPU appears to be flat, but ours is a business which is dependent on daily revenue. So actually, there is a reduction of 2 days on quarter-to-quarter. So effectively, if we look at on a daily basis, the ARPU has actually grown by 2%, which is a decent growth of ARPU quarter-on-quarter.
I'm sorry, sir, I was looking on a Y-o-Y basis, 4Q FY '20 versus 4Q FY '21?
Sorry, FY '20 versus?
4Q, FY '21.
Just give a minute. I didn't quite -- sorry, could you repeat your question?
Yes, sure. So on a Y-o-Y basis, if I look at the ARPU, despite the higher number of 4G users, the ARPU seems to be slightly lower or flattish. So why is there a disconnect, the decrease we've seen?
Year-on-year, that will have to be normalized for interconnect charges, which have gone away. So last year, we used to have interconnect charges in Q4 if that is what we are looking at, there is no interconnect. And that could be the reason for the gap. So I do not exactly know what figures are you comparing, but if you're comparing any figure in FY '20 with Q4, that would have an impact of IUC. So can I suggest because if we are looking at a specific figure, maybe you can connect with Arpit offline and we can explain you. But as I said, Q3 to Q4, our effective ARPU on a daily basis has improved by about 2%. Year-on-year, if you are making a comparison that will have to be seen for interconnect charges normalization.
The next question is from the line of Pradyumna Dalmia from Lansdowne Investment.
I must say I'm slightly disappointed today and that as a shareholder because of our inability to raise capital over the last 9 months or so, especially at a time when our competitors have been successful at raising billions of dollars during this time, right? And yes, the sector is under pressure. ARPUs are low AGR dues are there, but that has impacted all the players, right? Maybe as severely -- little more severely than some of the others. But I'm still unable to understand, and this is a question I had asked in the last call as well that why have we not been successful in raising capital and attracting investment at such time. And also the kind of commentary that I've been seeing and hearing from the management over the last week or so is a little concerning when it says to the DoT that look, there are concerns about the company crying on as a going concern. And obviously, the -- I mean the -- it is almost inevitable that the company will not be able to pay the AGR dues in -- sorry, the spectrum dues that are due in April 22. So what happens if there is no relief from the government or the SC on the AGR dues? Could you just clarify those points, please?
So I think it's -- I certainly don't want to say much beyond on funding and the timing than what has already been said. All I can tell you is that we are fully engaged with investors. There continues to be interest, and we will announce something as soon as the company is in a position to announce. So I think that, unfortunately, is the best I can tell you in that regard.
Is there any time line that we've set or a deadline? Or...
As I said, no dealine has been set, and I cannot talk about the time lines. When the company is in the position to inform and make an announcement, we will make an announcement, but I cannot speculate on time lines for you. In regards to the other question that you had mentioned, in regards to the DoT, I think the -- I explained earlier -- in the earlier question that was asked, which was the reason why there was a spectrum moratorium that was given 2 years ago was because of the stress in the industry. It is well recognized. And while other players you are mentioning are under the same stress and they have raised cap, they are also enjoying the benefit of the moratorium because they continue to be under stress as well. So I think from that perspective, we are in the same situation. And unless the underlying conditions of tariff increases on floor pricing, which are absolutely important in the industry. And again, these are not something that we say. They are said by all the players in the market. Representation is done by everybody through the COAI saying that there is stress in the industry and not sufficient returns are being made in this industry. These are issues that impact everybody, and they have been mentioned repeatedly. I think it's only fair to say that unless those issues get addressed, to some extent, magically to say that the moratorium should be lifted is really unreasonable. And I think our communication with the DoT it is just that regard to notify them that unless those issues are addressed, the stress in the industry continues, for which potentially a moratorium would need to be extended further. I think that's pretty much the only thing that we can say. I would not like to talk further about the contents of the letter that we add to DoT is a confidential manner.
Sure. But I mean, in the event that the DoT does not grant this extension of the moratorium, and we do not get any relief from the SC on the calculation of the AGR. What is the eventuality or what are the options that we are looking at?
I think it's very difficult and it's certainly not the right place for me to speculate on any of those options. I think we have made it very clear what we have asked of the government. And I've made it also clear what we have said in our modification applications, which is in front of the Supreme Court. And hopefully, the hearing on that will be taking place soon. It is completely inappropriate for me to speculate on what those other entities will do in regards to those important decisions.
The next question is from the line of Sachin Salgaonkar from Bank of America.
I have 2 questions. First question is, what is plan B if you guys are not able to raise funding? And I'm not asking you guys to speculate, but just wanted to understand out here.
Sachin, that was the only question that you had. I think the -- we remain confident that there is an opportunity to raise funding for the company. I don't think at this point, a plan B for funding is needed. We have a plan. We are engaged with investors. We expect this to take place. And as soon as it's there, we will report it. But I don't think there is any reason to start creating plan B because funding is not happening. We are not at that point yet. I don't think we will reach to that point. We are confident that funding will take place in the coming weeks.
Okay. Sir, the reason I'm asking it is there was a media article today, which talks about Vodafone Idea actually mentioning a letter to DOT that investors are unwilling to invest into the telco until the industry helps improve and hence I'm asking that.
No. Sachin, as you know, that media speculates a lot. There's a lot of speculation. If I have to start answering every media speculation that takes place, I think it will be really difficult to do that. So I would prefer not to respond to media speculations, stories are working every day, and I'm not really sure if we should be responding to any speculation that takes place in the media.
My second question is I wanted to actually understand that you guys are being noted as the best network on Voice and Data. And despite that we are seeing Vodafone Idea are losing customers every quarter. So what could be done more by you guys so that the net add subscribers goes back into the positive territory?
Yes. Very good question, Sachin. I think -- so first of all, it is absolutely true. We've been rated the best network. The quality of the network that we provide to our customers and what they enjoy is absolutely fabulous. And I think in many ways, we are very proud of what we have been able to achieve through a fairly difficult and complicated integration of the 2 companies and then further refinement and fine tuning and adding up capacity as well as coverage in our networks. Now I think what I would say is that we -- once we did the integration and consolidation and we optimized the network, as you know, we have also launched our brand Vi, which is only 6 months old. Actually a little bit more than 6 months old. And within that part, part of I think is for people to recognize, customers to recognize, nonusers to recognize the quality of our network, the pull of our brand, which is starting to happen, and we are building operational momentum on that. Also, you will notice that for the last 2 quarters, our customer base is now stabilized, whereas earlier on, we were losing a significant number of customers. And then more importantly, the important area of 4G customers, we have now grown consecutively for the last 2 quarters since the launch of our brand. We are in a positive momentum. And we believe that, that is the right way to build on the forward momentum on subscribers and gain the right type of subscribers in the marketplace rather than just saying that I will add subscribers, which are bottom of the pyramid or low value subscribers. And our 4G additions, as you -- as I mentioned in my opening speech, has been the highest in the last 5 quarters. Again, we're building momentum there, and the right type customers are coming to the network, they're enjoying the quality of the network. And we hope that, that momentum will continue going forward. Although, obviously, for COVID regions, there are challenges there as well. But otherwise, I think we are going in the right direction. And I think this is really an important factor for the company, and our focus is very much on operational improvements, on driving the saliency of our brand and a positive pull for Data customers going forward. As you can also see, Data volume growth was 8.5% quarter-on-quarter. That is, again, our customers are enjoying better quality data, they're coming to us for the quality of our network, and we hope that momentum continues. And overall, we have shown that our customer base is now stable.
And one last question is about the Jio, Google smartphone. Now when note -- when we saw last time Jio launching the feature phone, we saw close to approximately 100-odd million subscribers Jio feature phone gained, let's say, over a period of 12 to 15 months. Now how do you look at this phone? So assuming they end up gaining obviously some kind of a subscriber base. Last time we did see churn from most of the competitors where it helped Jio. So how do you look at your base and the impact on that base on the back of the launch of this phone?
So again, Sachin a very, very important question. So let me start off by saying it's impossible for me to comment on the phone that they are building. Of course, I don't have any information and knowledge that is not public already. And who knows what that phone will do, what the prices will be and so on. That's obviously time will tell on that part. I can tell you how we look at this segment and market. And maybe I'll take 2, 3 minutes to describe that. First of all, if you look at the Indian 4G smartphone market, when I say 4G smartphone market, I'm talking about subscribers who use smartphones the way smartphones are designed to be used. If you just have a smartphone like my mom does, but never does anything with it other than make a voice call, then you can have a smartphone. That doesn't necessarily mean that you are a well users of smartphone. So if you look at that market specifically, only 2% of the smartphones that are sold in the market are less than INR 5,000. What does that mean? That means if you want to have a good experience on 4G, if you want to use a smartphone for things that it is made for, which is taking pictures, sending pictures, doing e-commerce, doing other social media type of activities, you need a quality smartphone, which unfortunately today, in whatever pricing that you do, the cheapest pricing that you do is more INR than 5,000. It's cost a little bit more. So our view in this market is really to say that we believe the best option is for us to make decent smartphones available to our customer base, but take the OEMs as well as NBFCs and allow our customers to purchase these smartphones in a manner which is financially suitable for them, which is really on installments that they can buy. They can also buy used phones through our programs in installments. And there, first of all, you provide choice to customers because having a skew of 1 or maybe 2 doesn't necessarily give choice because smartphone is a very personal item. Secondly, it also gives you the ability to choose the price point that we want. Some may want INR 8,000, some may want INR 10,000 or INR 12,000 because you can afford more, but you get a good quality phone in a installment phase. This is our belief in giving customers the choice and the ability to finance. We believe it is the right way of doing it, rather than making in a phone, which maybe has been pushed to the limit in terms of pricing, then on top of that potentially subsidizing it. And so you have to put a lot of money on the table to say, "I will pay you, I will a subsidize this much too for you to take the phone." I think it's not -- in our view, is not providing the right choice to the customer. So we believe that our model is the right one, and I think that's the one that we are focused on. We are certainly not looking to take the phone and subsidize them heavily to sell as part of the -- our packages. I think we believe more in giving choice and allowing those installments to take place. And I think that is, in my view, the right model. So that's all our focus is. What they will do, just time will tell.
The next question is from the line of Chen Samuel (sic) [ Samuel Chen ] from AllianceBernstein.
Can you hear me?
Yes, we can hear you.
This is probably less of a question but more of a discussion and the thoughts. So, so far, we have here about quite a bit of ARPU pressures and everything else, and especially from Sachin, talking about the entry-level customers as well. But when I see Vodafone Idea, when I hear the Vodafone Idea, the premium brand is the first thing that I think about. And if I look at your current subscriber, yes, you have been losing 11% share since the merger. But those are -- most of the customers you lost are, in a way, entry-level customers. People who pay INR 50 to Jio, most of the time. You have majority of the wealthy regions in India. And if I remember correctly, I overheard on Bharti's call, Vodafone Idea and Bharti jointly together owns more than 80% of India's high-value customers. The higher value customers really are not suspectable to what happened to the pandemic like in the past, few months as well. You have the best spectrum asset in India. You have a very good network. When I visited Mumbai, there was nothing. But why can't you charge -- instead of thinking about subscriber, which is important for sales. And I have heard from Bharti that they will follow if anybody raise price, like he said it multiple times. Why can't Vodafone Idea raise price on certain segments where they are less price-sensitive? And what are some of the thoughts there in increasing those revenues? Because I'm sure if you are able to work with your high-end customer, getting a little bit of revenue over there, that will also help with the fundraising on the other side. Just wanted to hear some thoughts from yourself.
First of all, Samuel, thank you very much for your comments and your observations. I think we feel in terms of the quality of our subscriber base, the quality of our network as well as the premiumness of our brand. I think we feel exactly the same way as well as the spectrum assets that you have pointed out. I think the debatable question, maybe this is something that you need to take a little bit more off-line as well because it's a lengthier discussion. The only comment that I can make is that today, there are 2 things that you have to think of. One, which is notable idea is already at a premium to Jio the market today. So it's not that we are at parity. We are already at premium. So I believe is Airtel as well. That's the first thing. The second part is from a segment perspective, which is a high-value customer that you talked about in the base, and in the market, the postpaid market, which is the high-value customer is pretty much -- we are still one of the largest ones in the country, and so it's our belief that Airtel has a large base there as well. That is at a further premium to the prepaid customers and prepaid pricing. So frankly, from a pricing perspective, we have already, in my view, pushed the envelope. And we continue to raise. We look at opportunities where we can, in particular segments, we continue to raise that. But we have already pushed the envelope for raising prices because we're already at a premium. And then in HVC, which is the postpaid market, we are further at a premium compared to prepaid. I think to some extent, even though, as you said, there are certain sort of people who are completely price insensitive. I think generally, the challenge that you end up, and this happens mostly in mass consumer marketing is that if you decrease prices, it doesn't matter, it's very difficult to do it only for a particular segment. And if you increase prices, many times, if you don't change it for another segment, people do tend to think about downgrading, which sort of in a way, doesn't necessarily lead to the growth that you're overall looking for. But I agree with you that first of all, pricing needs to go up. We are already at a premium and with the premium set of customers. and we continue to push this envelope further every time we get an opportunity. But I think this is probably a discussion that we should have in more detail at the right time. I'm happy to do that with you offline.
The next question is from the line of Pranav Kshatriya from Edelweiss.
I have only one question. I want you to talk about the ARPU differential. If I look at the competition, ARPU is significantly higher versus Vodafone Idea's. And earlier, there was an expectation that you will basically let go of some low-value customer. And what is important to note is that this ARPU differential has persisted despite 4G addition sort of coming your way at least in the last few quarters. So what exactly is leading to that is what I would like to know.
So maybe I'll just start and if Akshaya can add more to it. I think that some of the important, of course, is the reason, first of all, our pricing in the market is very similar to the pricing for example with Airtel. And the only reason why our ARPU is lower than them is due to the mix of how many 4G unlimited customers we have in our base versus how many 4G unlimited customers they have in base versus the low-end customers. So it's only a matter of mix, but I don't have data on them specifically. But I have no reason to believe given, again, the size of the postpaid base that both of us have as well as that from a customer perspective, we are, I don't there is any reason there should be an ARPU differential with them or not. It's really purely a matter of mix. So when we report our overall ARPU based on the blended mix, it obviously looks like we had lower than them, which we are based on the mix that we have, not that we sell products cheaper or we have a customer base that has lower value for the same sort of services that we offer. I don't know if that answers your question. And Akshaya if you have anything further to add.
So the only thing I'll add is that I think some of it is also coverage related and where we are not able to increase our 4G subscribers as we would want to or convert our 2G subscribers to 4G, where we currently lack in 4G coverage, and that is an area we'll address going forward.
Okay. But I mean I just wanted to guess -- gauge, you had talked about the low ARPU customers sort of trimming them and -- which will sort of drive up ARPU. And that's why you had earlier -- basically minimum ARPU plans were introduced. So -- but that doesn't seem to have created too much of an impact? Or am I missing something here?
No, I think the -- as the 4G customers go up, ARPU does go up. Akshaya, I also mentioned quarter-on-quarter here as well. It doesn't -- once you do the calculations on ARR basis, ARPU this quarter has also gone up. And the new additions for broadband 4G customers that come in, they obviously come in at a higher ARPU. I think we are not trying to drive a way somehow low value customers. I don't think that -- not sure if the other -- our intention is to say we want to drive them away. I think what we want to do is obviously as they choose to convert from 2G to 4G, we want to be the operator that they choose for that journey. In some cases, they do, as you would have seen in our -- again in our numbers. In some cases, if we are in an area where I do not have 4G coverage because I am disadvantaged today on some 4G coverage, then of course, I don't have that option to entertain that customer. But we are not trying to drive away any particular low value customers to say. What we did not want was set up customers who are there who do not pay us anything, but end up using network, which is why there's a minimum validity plans that are there or minimum pricing plans that are there overall to maintain that. I think that's the strategy. Hopefully, that helps with the answer.
Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. I now hand the conference over to Mr. Ravinder Takkar for closing comments.
Thank you, Margaret. So to conclude, I think it's fair to say that these are challenging times for our country as well as for our organization. I think we are also aware of the fact that our duty and the critical role that we play in connecting the nation, and we remain committed to doing that to help our employees, customers, vendors and partners in every possible way. We're also keen to provide uninterrupted services and exceptional quality of service, and we remain committed to being the best 4G network in the country and in turn also remain committed to our strategic advent. I want to thank each one of you for joining this call. Please stay safe, and have a good evening. Thank you very much.
Thank you. On behalf of Vodafone Idea Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.