| We have pleasure in presenting the Twenty Ninth Annual Report, together with the audited financial statements of the Company for the Financial Year ended March 31, 2024.
INDIAN WIRELESS SECTOR
The mobile telecommunications industry being an integral part of the Indian economy has contributed significantly to the economic growth and the GDP of the country over a period of last three decades by providing seamless connectivity services to millions of Indians. The continued accessibility to mobile services and low priced tariffs has spurred the growth and deployment of wireless broadband internet. The growth of the mobile telecommunications industry, thus has had a positive influence on the overall economy. The Mobile telecommunication has supported the socio-economic development of India and has played a significant role to narrow down the rural-urban digital divide to some extent as well as it continues to be the pillar of support to the many tele enabled services launched to effectively tackle the needs of our nation. It generates revenue for the Government and creates large employment opportunities for multiple sections of the society, directly and indirectly as well as generate new business opportunities in the Digital Era.
The telecommunications sector is serving as a backbone to the economy and its presence in our lives has been bolstered by the sharp increase in digital adoption across India. It has led to the creation of subcategories that are thriving due to telecom. We are seeing a rise in the adoption of new-age technologies like M2M communication, IoT, drone technology, big data, cloud computing, ML/AI, and robotics that are growing on the bedrock of telecom.
India is the world's second-largest wireless market. Its total wireless subscriber base reached 1,165 million as of March 2024. It is pertinent to note that the industry added 21.6 million subscribers and witnessed a growth of ~2% during Financial Year 2023-24. The overall tele-density increased from 82.5% in FY23 to 83.3% in FY24. However, it is still low at ~83% in comparison with other global markets. As of March 2024, urban tele-density stood at 127.5% and rural tele-density stood at 58.9%. The low rural penetration provides significant headroom for further improvement as rest of India upgrades towards wireless broadband
connectivity. More importantly, the 4G penetration at ~60% in India, is low in comparison to 4G penetration of 118% in China, 126% in UK, 116% in US etc.
India also ranks as the world's second-largest market, in terms of wireless internet subscribers. The number of wireless internet subscribers in the country increased at a CAGR of over 10% during last 5 years to reach 884 million in FY24. The growth during the current financial year 2023-24 was 8.72%. Total wireless data usage in India grew 3.5x during the last 5 years from December 2018 to December 2023. Average Wireless Data Usage per wireless data subscriber per month stands as 19.47 GB in December 2023 as compared to 8.74 GB in December 2018.
The hyper-competition in the sector since FY17 led to unsustainable tariffs; forcing exit of multiple operators and sector consolidation leading to a negative revenue growth for the industry between FY16-FY19. However, from FY20-FY24 stable period followed due to regular price increases and customer upgrade from 2G to 4G and these factors should continue to support the industry growth going forward. The applicable gross revenue of the telecom sector stood at ~ ' 2,598 billion in FY24 as per TRAI data.
With low penetration and potential ARPU growth, India continues to remain an attractive market for telecom industry despite the past challenges of hyper-competition and subsequent financial stress in the sector. The consolidation of the industry to three private operators and one government operator positions the industry well to benefit from the growth opportunities on the back of India's digitalization trend and Government's vision of Digital India. The sector requires large investments to offer better services to the customers, as the technologies keeps on evolving so the customer needs. India have the lowest tariffs globally, while the proliferation of unlimited data bundles has led to India being one of the highest data usages (per subscriber) in the world. With this backdrop, all the private operators increased pre-paid as well as postpaid tariffs in June 2024 across price points. While the tariff hike was a step in the right direction, ARPU level reaching to a level which offer reasonable return on investment made by the operators, still has a long way to go.
While the operational challenges continue, the government has fast-tracked reforms in the telecom industry and continues
to be proactive in providing room for growth for telecom sector companies. Over the last few years, the following major initiatives were taken by the government:
Effective April 2021, Production Linked Incentive schemes for manufacturing of telecom and networking products under Atmanirbhar Bharat Abhiyan for a period of 5 years.
In September 2021, the government announced comprehensive Telecom Reforms package with measures to address the structural, procedural and liquidity issues.
In October 2021, the government notified 100% foreign direct investment (FDI) via the automatic route from previous 49% in the telecommunications sector.
Lowering the reserve price of spectrum in auctions and allowed spectrum payments to be spread over the spectrum validity period of 20 years which enabled the telecom operators to make large commitments in the spectrum auctions as well as towards rolling out the next generation wireless networks.
Removed Spectrum Usage Charges on spectrum acquired through auctions after 2022.
Telecommunication Act, 2023 was passed in December 2023, some of the main points addressed in the Act are:
o Clearly defined and progressive right of way framework;
o Central adjudicatory mechanism has been established;
o Penalty structure being rationalized;
o Scope of Digital Bharat Nidhi Fund has been expanded;
o Central Government may provide for security interest to lenders;
o Protection of Telecom Networks as critical infrastructure;
o Laying down both the rights as well as the duties of users;
In a separate development, the Spectrum Auction was conducted across 8 frequency bands i.e. Sub GHz band 800 MHz band, 900 MHz band, Supra GHz band - 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, Mid 5G spectrum
band 3300 MHz and High spectrum band 26 GHz band. It commenced on June 25, 2024 and concluded on June 26, 2024 after 7 rounds of bidding spread over 2 days, with spectrum of ~ ' 113 billion acquired by the telcos.
India is witnessing a digital revolution since the last decade. The telecom industry occupies a unique position at the nexus of technological change, geopolitical strain, economic shift and societal development. The sector provides vital services on which billions of consumers and virtually all businesses rely. The telecom operators are not just offering voice and data services, but also a suite of digital service applications, own as well as through partnerships, and are thus transitioning from being pure telecom service providers to integrated digital service providers offering entertainment, information, security, cloud and storage services. The telcos are working in the broader ecosystems that are transforming this vast industry as they are determined not to rely solely on revenues from connectivity.
COMPANY OVERVIEW Mobile Business Overview
Your Company, an Aditya Birla Group and Vodafone Group partnership, is a major telecommunication operator in India, offering Voice, Data, and other Value Added Services ("VAS"), business connectivity services including IoT, Cloud, Managed Services etc. Your Company is continuously engaged in introducing newer and smarter technologies for its retail and enterprise customers. Your Company offers technologies with innovative offerings that can be accessed conveniently through an ecosystem of digital channels as well as extensive presence on the ground.
1. Voice Services
Your Company offers Voice services in all 22 service areas. Your Company now covers more than 1.2 billion Indians in over 487,000 census towns and villages with its Voice services. Your Company also provides 4G VoLTE across all 22 circles to provide enhanced voice experience to its 4G subscribers. Your Company has now expanded Voice over WiFi (VoWiFi) calling feature for its subscribers in all circles.
2. Broadband Services
Your Company provides broadband data services on 3G and/or 4G platforms in all 22 service areas of India.
Your Company's broadband coverage is available in over 342,200 census towns and villages, covering more than 1 billion of the Indian population. The population coverage on 4G is more than 1 billion as well, as of March 31, 2024. Your Company has thus seen a steady rise in 4G subscriber penetration (as a percentage of reported subscribers) increasing from 54.3% in Q4FY23 to 59.4% in Q4FY24. As your Company continues to focus on 4G network expansion, 4G subscriber penetration should further improve in the coming years.
3. Content and Digital Offerings
Your Company offers not just enriched connectivity but also an array of digital products and services to complement the core business to address the requirements of today's digital society enabling individuals and enterprises to get a range of benefits and value-adds. As Vi continues to strengthen its partnership portfolio, your Company has integrated all content on Vi App to allow easier access to users without having to download multiple apps. With this integration now Vi users can watch Movies, Web Series, live TV channels, play Games and watch short Videos on the Vi App.
To enable access to the best in class content to the customers, your Company has relaunched Vi Movies & TV as a paid subscription service offering multiple OTTs under one plan, specifically targeting Smart TV consumers, who can get all their favourite OTTs through one plan. Company has brought 17 OTT partners onboard for this offering including the likes of Disney+ Hotstar, Zee5, SonyLiv, Fancode, Klikk, Atringii, Ullu, Manorama Max, Chaupal, Playflix, Namma Flix, Distro TV, Shemaroo ME, Hungama, YuppTV, NexGTv and Pocket Films. Additionally, the subscription also allows access to 400+ TV channels. In order to offer a superlative viewing experience with a convenience of discovering all the content from the partner apps, all new mobile apps have been developed for both Android & iOS as well as TV apps for multiple operating systems like Google TV, Samsung, Firestick & LG.
Your Company continues to scale the bundling play on OTTs by continually expanding the portfolio with existing partners as well as bringing new partners on board. Your Company had launched the first bundle proposition with Amazon Prime on prepaid and has now introduced a quarterly bundle with Prime Lite on prepaid.
Your Company offers gaming service - Vi Games on Vi App. Vi Games offers a wide variety of individual hyper casual games in partnership with OnMobile and recently expanded its offerings with a strategic partnership with global leaders like Gameloft. It also has multiplayer or social games under Vi Games. This includes casual games like Solitaire, Carrom, Wordle, Ludo, Sudoku, Cricket, Soccer, Rummy, etc which one can play with friends or online players or even participate in ongoing daily tournaments. The App also has an eSports platform in partnership with GamerJi, enabling the gaming enthusiasts to participate in eSports tournaments on popular titles like Free Fire Max, Call of Duty, Clash Royale, Asphalt 9, World Cricket Championship 3 & more. Your Company recently launched CloudPlay - our proposition on Cloud Gaming that enables consumers to play AAA games on cloud without having to download and install these games on their devices. This service has been launched in partnership with CareGame, a Europe based cloud gaming company.
Your Company has `Vi One', a converged proposition to the consumers, offering broadband + mobility + OTT under one plan. This has been launched in 3 circles as of now, in partnership with You Broadband and will be expanded to other circles in partnership with other ISPs.
With a view to establish Vi App as a preferred destination, your Company has integrated `utility bill payment' functionality on Vi App enabling the users to pay their electricity bills, water bills, LPG bills, insurance premium, loan EMIs, recharge FASTAG or their DTH or broadband subscriptions.
Further, leveraging telco data and access capabilities to create a digital marketplace, your Company has launched `shop' section on Vi App in partnership with leading players across categories like entertainment, food, shopping and travel.
4. Other Value Added Services (VAS) Offerings
Your Company offers a variety of other Value Added Services (VAS) offerings, including:
- Entertainment services such as sports (score updates), IVR based content, WAP based games;
- Voice and SMS based services such as caller tunes, voice and SMS chat, star talk, expert advice and subscriptions services; and
- Utility services such as missed call alerts, doctor on call, astrology services etc.
Long Distance Services and ISP
Your Company holds licenses for NLD, ILD, ISP and IP-1 services. These licenses are used to carry inter-circle voice traffic of your Company and also bring incoming voice traffic from top international carriers across the globe into India. Your Company also sends all of the outgoing International Voice traffic on its own network and the interconnections with these licenses enable it. These licenses also help your Company to offer various Enterprise Fixed Voice and Data Services to external customers like Enterprise, Government and Wholesale customers. Vodafone Idea ISP currently handles all captive subscriber traffic requirements.
Business Services
Vi Business provides total communications solutions to empower global and Indian corporations, public sector & government bodies, small & medium enterprises and startups. With well-established enterprise mobility, robust fixed line connectivity, world-class IoT solutions and insightful business analytics & digital solutions, your Company brings the smartest and newest technologies to serve businesses in the digital era. With the advantage of its global expertise and knowledge of local markets, Vi Business endeavours to be a trusted and valued partner for businesses in a digital world. As Vi Business progresses on the journey from telco to techco, your Company continues to strengthen engagement with customers with a range of offerings like Vi Secure, Integrated IoT, Managed SIP, and Vi Business Plus bundled mobility offering.
Competitive Strengths
Your Company believes that it is well positioned to exploit the growth opportunities in India's rapidly expanding mobile telecommunications industry. The key competitive strengths are set out below:
1. Large Subscriber Base
Your Company is the sixth largest telecommunications service provider in the world based on subscriber base (Source: GSMA Intelligence Dashboard). As of
March 31, 2024, your Company had over 219.8 million subscribers and our subscriber market share was 18.9% as per TRAI Subscription Report. The applicable gross revenue (ApGR) market share was 18% of the Indian mobile telecommunications services industry for the year ended March 31, 2024 as per TRAI Data. During the year ended March 31, 2024, your Company had a leading ApGR market share in the Kerala and Mumbai service areas, and the second largest ApGR market share in the Gujarat and Kolkata service areas. For the same period, ApGR market share was over 20% in the Haryana, Maharashtra, Uttar Pradesh (West) and Delhi service areas.
On a reported basis, your Company has 212.6 Mn subscribers as of March 31, 2024, of which 126.3 Mn are 4G subscribers. As it continues to expand broadband coverage and capacity, the large subscriber base provides a platform for us to communicate effectively and utilise data and analytics to enable personalisation at a large scale. This also enables to upgrade our voice only customers to users of data services and our large array of digital offerings, and helps maintain competitive position in the market. Your Company also utilizes artificial intelligence and data analytics to improve some of our services, including customer segmentation, targeted marketing, offering personalised recommendations, and location based services, among others.
2. Competitive Spectrum Profile
Your Company has a total of 8,030.4 MHz of spectrum (including spectrum acquired in June 2024 Auction) across different frequency bands out of which 8,012.8 MHz spectrum is liberalised and can be used towards deployment of any technology.
This includes the recently acquired sub GHz spectrum (900 MHz band) in 7 circles, namely Andhra Pradesh, Tamil Nadu, Karnataka, Punjab, Rajasthan, Uttar Pradesh (East) and Kolkata, enabling your Company to dedicate adequate 900 MHz band spectrum for 4G thereby enhancing the experience of 4G customers in these large markets, particularly the indoor experience. In addition to 900 MHz spectrum, the Company has also acquired 1800 MHz spectrum in Madhya Pradesh and 2500 MHz spectrum in Bihar, which will help in
increasing the network capacity quickly. Your Company has mid band 5G spectrum (3300 MHz band) in 17 priority service areas and mmWave 5G spectrum (26 GHz band) in 16 service areas.
Your Company, thus, has a solid portfolio of spectrum across all bands in all the priority circles. This large spectrum portfolio enables offering a superior
experience to the customers as your Company has the highest 4G spectrum available per million subscribers and sufficient capability to support migration of entire 4G subscriber base to 5G. With the emergence of 5G technology, it further enables strengthening the enterprise offerings and provide new opportunities for business growth.
Below table provides the spectrum held by your Company across all service areas:
Spectrum Frequencies (MHz)
Total FDD x2 + TDD
Circle
FDD
TDD
900
1800
2100
2300
2500
3300
26000
Andhra Pradesh
7.4
10.0
5.0
-
20.0
50
200
314.8
Bihar
-
13.4
5.0
-
20.0
50
-
106.8
Delhi
10.0
10.6
5.0
-
20.0
50
200
321.2
Gujarat
11.0
20.8
10.0
-
30.0
50
450
613.6
Haryana
12.2
15.8
15.0
-
20.0
50
400
556.0
Karnataka
7.2
15.0
10.0
-
-
50
200
314.4
Kerala
12.4
20.0
10.0
10.0
20.0
50
800
964.8
Kolkata
7.2
15.0
10.0
-
20.0
50
200
334.4
Madhya Pradesh
7.4
19.8
5.0
10.0
20.0
50
400
544.4
Maharashtra
14.0
12.4
15.0
10.0
30.0
50
400
572.8
Mumbai
11.0
10.2
10.0
-
20.0
50
200
332.4
Punjab
6.8
15.0
10.0
-
20.0
50
300
433.6
Rajasthan
6.8
10.0
15.0
-
20.0
50
300
433.6
Tamil Nadu
7.4
11.4
15.0
-
-
50
300
417.6
Uttar Pradesh (East)
6.8
10.0
20.0
-
20.0
50
250
393.6
Uttar Pradesh (West)
10.0
15.0
10.0
-
20.0
50
350
490.0
West Bengal
6.8
21.6
5.0
-
20.0
50
400
536.8
Priority Circles
144.4
246.0
175.0
30.0
320.0
850.0
5,350.0
7,680.8
Assam
-
25.0
5.0
-
20.0
-
-
80.0
Himachal Pradesh
-
11.2
5.0
-
10.0
-
-
42.4
Jammu & Kashmir
-
17.0
5.0
-
10.0
-
-
54.0
North East
-
25.8
5.0
-
20.0
-
-
81.6
Odisha
5.0
17.0
5.0
-
20.0
-
-
74.0
Other Circles
5.0
96.0
25.0
-
80.0
-
-
332.0
Total Liberalised Spectrum
149.4
342.0
200.0
30.0
400.0
850.0
5,350.0
8,012.8
Non-Liberalised Spectrum
8.8
17.6
Grand Total
149.4
350.8
200.0
30.0
400.0
850.0
5,350.0
8,030.4
3. Extensive Network Infrastructure and Coverage
Your Company has a strong network footprint across the country which enables it to offer comprehensive consumer offerings as well as have substantial capacity spectrum to address the growing data demand. Your Company has a large network infrastructure of 2G, 3G, and 4G equipment, along with a nationwide fibre optic cable (OFC) network. As of March 31, 2024, your Company operates approximately 183,800 unique tower locations across more than 487,000 towns and villages in India, and offer broadband services (3G and 4G) at more than 430,700 broadband (3G and 4G) units, covering over a billion people. Your Company has witnessed an increase in 4G population coverage following the Merger from 530 million for Vodafone and 655 million for Idea prior to the Merger, to over 1 billion Indians, as of March 31, 2024.
Your Company has OFC spanning over 299,300 kilometers, combining both own infrastructure and IRUs taken (excluding overlaps). We provide VoLTE services throughout India and voice over WiFi ("VoWiFi") services in selected regions, with potential for gradual nationwide expansion. All 4G sites are enabled for the provisions of VoLTE services.
Your Company continues to focus on enhancing its 4G infrastructure. During the year, your Company continued to aggressively upgrade its 3G network to 4G. Your Company has been deploying LTE on TDD band of 2300 MHz and 2500 MHz spectrum band to expand the capacity and on 900 MHz band on select sites to improve customer experience in dense areas. Your Company also deploys Dynamic Spectrum Re-farming (DSR), Massive MIMO and Small Cells to maximize spectrum efficiency.
4. Power Brand
Your Company's brand VI, which was launched in September 2020, continues to garner strong awareness, building brand affinity across all customer segments in the country. Your company continues to make extensive progress on the marketing front by communicating key differentiators to consumers, entering into alliances and introducing various innovative products and services.
Brand VI is building a competitive advantage by increasing customer engagement and heralding a
new digital ecosystem with Vi Movies & TV, Gaming, eSports, Cloudplay and digital marketplace. In line with the company's strategy of accelerating unlimited base & 4G adoption through differentiated product offerings, your Company promoted the Hero unlimited pack for prepaid users which highlighted the benefits of Unlimited night data, weekend data rollover across TV & digital and for postpaid users, your Company promoted `Choose Your Benefit' on Vi Max postpaid -a pioneering feature allowing customers to customize plans based on their needs. Further, through the international roaming campaigns, your Company promoted the exclusive benefit of truly unlimited calls and data on international roaming available for both prepaid and postpaid customers. It was targeted to foreign travellers through contextual placements on travel portals and via WhatsApp messages.
Your Company recently launched its new brand campaign - `Be Someone's We (V!)', rooted in the company's vision of being a partner to its customers; in building a better today and a brighter tomorrow. This is relevant in today's world as several studies indicate that people from all walks of life, especially the GenZ & millennials are struggling with challenges such as loneliness and social isolation; impacting their overall well-being. The campaign underscores the crucial need to establish genuine emotional connections in our ever evolving phy-gital world. This campaign is designed to deliver a powerful message of supporting one another through both good and challenging times and illustrate how a network can serve as a bridge for forming human/social bonds, promoting inclusivity and fostering a sense of togetherness. This campaign was promoted across TV, digital & on ground. To exhibit being someone's we, various on-ground engagements were carried with NGOs, old age homes etc. to celebrate the brand's promise with people who feel lonely. The employees, along with more than 500 kids from NGOs created a Guinness World Record for largest notebook sentence, with 23K+ notebooks across 1lakh sq.ft to generate awareness of `Be Someone's We'. These notebooks were then distributed amongst the children, bringing a smile on their faces.
At The MOMMYs 2023 awards, Vi won `Best Social Media Brand- Telecom' and `Best use of memes'. At AFAQs Marketers `Xcellence Awards 2023, Vi won
5 awards - 1 gold, 1 silver and 3 bronze for Best use of influencer marketing, Best use of Instagram, Best use of short form video, Best performance marketing and Best use of influencer on YouTube. At AFAQs Brand Storyz Awards 2023, Vi won Gold for Best Use of Data for "Doubling digital acquisitions for Postpaid via customised messaging & precise targeting and Gold for Best Use of Social Media for "Vi Sach mucch too mucch campaign". Further, Vi Dabbawala campaign won Gold for Innovative Use of Influencers at Spikes.
OVERVIEW OF KEY STRATEGIC INITIATIVES
The key strategic pillars of your Company are:
1. Focus on Network Investments
Your Company's investments have been impacted on account of liquidity constraints over last few years. During Financial Year 2023-24, network investments were focused on refarming 2G & 3G spectrum to 4G, which has added incremental 4G sites with minimal capex for software upgrade. Your Company has closed around 26,700 3G sites during the year and since most of these sites already had one carrier of 2100 MHz band deployed towards 4G, the net addition in was around 5,000 sites. Resultantly, our broadband site count stands at 430,628 vs 443,537 a year ago. The re-farming of 3G spectrum to 4G on majority of sites in various cities has substantially enhanced the GIGAnet 4G capacity which is now over 3.1x compared to September 2018, just after the merger. Your Company has also been driving fiberization of 4G sites to support capacity expansion and the overall fiber footprint stands at ~294,000 km, including own built as well as IRU, excluding overlapping routes.
The Equity funding and proposed bank facilities are to be utilised primarily towards capex over next 3 years which is expected to be in range of ' 500 to 550 billion, which will enable your Company to effectively compete and participate in the industry growth opportunities.
The capex will be towards expanding 4G population coverage in 17 priority circles which contribute over 98% of our revenue and around 92% of Industry revenue, 5G launch in key cities or geographies and capacity expansion to address the increasing data demand. It is important to note that since your
Company will be launching 5G now, it will be well placed to effectively utilize the capex spend as it will be able to address a part of the capacity requirements via 5G instead of 4G.
During the Spectrum Auction 2024, in addition to renewal of 900 MHz spectrum in Uttar Pradesh (West) and West Bengal circles, your Company has also enhanced its 900 MHz spectrum holding in 7 circles, namely Andhra Pradesh, Tamil Nadu, Karnataka, Punjab, Rajasthan, Uttar Pradesh (East) and Kolkata, enabling it to dedicate adequate 900 MHz band spectrum for 4G thereby enhancing the experience of its 4G customers in these large markets, particularly the indoor experience. In circles of Andhra Pradesh, Tamil Nadu (excluding Chennai), Punjab and large parts of Karnataka and Uttar Pradesh (East), 4G on sub GHz 900 band will be offered for the first time which will result in better coverage and experience. Also, instead of DSR your Company will now have dedicated 900 band spectrum for 4G, where the experience for 4G subscribers will also improve. Your Company has also acquired 1800 MHz spectrum in Madhya Pradesh and 2500 MHz spectrum in Bihar, which will help in increasing the network capacity quickly.
For 5G, your Company has the advantage of having latest 4G equipment and technologies which are capable of upgrade to 5G. Your Company's 4G network has been strategically deployed with a future-proof architecture, and all our new basebands and over 90% of our Time Division Duplex ("TDD") 2500 MHz band radio units are 5G-ready with 10G bandwidth capability. We have also deployed various advanced 5G technologies including Massive Multiple-Input Multiple-Output ("Massive MIMO") for improved capacity, and Open Radio access network ("ORAN") for increased flexibility. As of March 31, 2024, we deployed ~74,850 TDD radios, ~13,950 Massive MIMO sites, and ~13,300 small cells. Moreover, your Company has completed the minimum rollout obligations by collaborating with Original Equipment Manufacturers ("OEMs").
Your Company's network also includes new unified roadmap architectures of virtualized radio access network ("vRAN") and ORAN solutions as well as E-band technology. The Pan-India core network is fully equipped to support 5G non-standalone (NSA)
technology. This advanced network architecture is designed to handle the high throughput and diverse use cases associated with 5G, encompassing both mobile and enterprise segments. Your Company's 5G-ready architecture enables latency reduction and helps us deliver an enhanced customer experience.
2. Market initiatives to improve ARPU
Your Company's priority remains on driving ARPU improvement. During Financial Year 2023-24, your Company had changed entry level pricing where the validity of ' 99 plan was reduced from 28 days to 15 days. In June 2024, your Company has taken several tariff interventions in the prepaid as well as postpaid tariffs across all price points including unlimited plans as well as combo vouchers.
While all these tariff interventions are steps in the right directions and will help in improving the ARPU, however such changes are not material enough to solve the structural issue that the industry is facing. Tariff hike remains critical to revive the sector and pricing structure has to change where operators have the ability to charge customers for incremental usage. India has amongst the lowest ARPUs in the world despite having one of the highest data usage per subscriber. Your Company believes the market will be able to absorb further tariff hikes, which is essential to operators to generate reasonable returns on their capital employed and support future investments, including investment towards advance technologies.
While tariff hike remains critical to improve the overall industry health, your Company has undertaken several market initiatives to improve ARPU with focus on driving 4G/UL plan penetration. Your Company is the only operator offering a range of unmatched benefits to its pre-paid customer by Offering Night Free Data and Weekend Data Roll Over with its `Hero Unlimited' plans. Further, a unique night data pack "Chhota Hero" was launched to allow customers to snack on content during the night with unlimited data. Further, in our endeavor to offer unprecedented benefits, we introduced `Choose Your Benefit' on Vi Max postpaid-a pioneering feature allowing customers to customize plans based on their needs. This marked the end of an era for postpaid plans that were one-size-fits-all. This
initiative enables our postpaid users the freedom to opt for exclusive lifestyle benefits across Entertainment, Food, Travel, and Mobile Security - a holistic solution that resonates with the digital lifestyle of today's users. Vi Max is a testament to your Company's dedication to driving value, power, and convenience for its cherished customers, enabling them to flourish in the digital era. Additionally, your Company is the only telecom operator in the country to offer truly unlimited data and call benefits on international roaming. It promotes its International Roaming packs with `Truly unlimited data and calls' on Digital.
As a part of Customer excellence drive, your Company continues to aggressively focus on digitalization of customer servicing as well acquisition across all touch points with a clear focus towards shift to digital. Your Company now has digital acquisition across major cities in India, for both prepaid and postpaid customers, including same day door step delivery and digital KYC processes, serviced through its dedicated delivery partners as well as own stores.
3. Focus on Business Services and new fast growing segments
Business Services or enterprise segment, is one of your Company's strength areas owing to its long standing relationships with enterprise customers as well as its ability to leverage from the experience of Vodafone group in various global markets. Your Company continues to make progress in line with its stated strategy of transformation from Telco to TechCo for enterprise offerings. The planned expansion of services beyond connectivity has seen good traction and your Company continues to work with multiple partners to make the offerings more relevant to enterprise customers. Despite the challenging environment, your Company has seen strong growth in several of the non-mobility enterprise segments during the year.
Your Company recognizes the role of reliable and highspeed connectivity and aims to further grow the core connectivity infrastructure, ensuring seamless data and voice communication for all customers. It aims to enhance our Vi Business Plus Mobility service by offering mobile security features to safeguard sensitive data and mitigate cyber threats. Vi remains steadfast
in its mission to deliver innovative solutions while upholding the highest standards of security. With data security becoming increasingly critical in today's digital landscape, Vi consistently makes efforts to strengthen its security posture and validate its position as a trusted custodian of customer data. Another significant achievement has been that we became the first Indian telecom operator to achieve the SOC2 Type II attestation. This attestation signifies that we are maintaining the highest standards when it comes to data security and safeguarding sensitive customer information.
Your Company offers IoT and integrated IoT solutions across smart mobility, smart infrastructure and smart utility, and aims to strengthen its market leadership in IoT connectivity across key sectors such as vehicle tracking, utilities, point of sale and automotives. It also seeks to drive category growth through research and development initiatives around new IoT use cases, offering dedicated IoT lab and consultation services.
Your Company also provides integrated end-to-end customer solutions. By creating a multicloud marketplace through a combination of own assets and through strategic collaborations, it aims to offer customers greater flexibility and choice in connection with their preferred service providers. Your Company is in the process of developing colocation and IaaS (Infrastructure-as-a-Service) services to accelerate digital transformation by simplifying and optimizing IT infrastructure management for businesses. Your Company aims to streamline mobile device deployment, management, and security, and provide cybersecurity solutions through Vi Secure.
Your Company aims to drive segmented go-to-market strategies, focusing on acquiring a larger share of the large enterprise customer markets and prioritizing growth of the SME and small office/home office markets. By leveraging the `ReadyForNext' digital assessment platform, your Company also aims to empower these businesses through digital adoption. On World MSME Day, Vi Business has conducted India's largest MSME assessment covering nearly 1 Lakh respondents across 16 Industries, published `Unlocking MSME Growth Insights Report' containing findings on the digital readiness of MSMEs. Your Company further launched a 360 degree `ReadyForNext2.0' program to focus on
growth from this segment covering the learnings from the above report, upgraded Digital Self Evaluation tool to help MSMEs harness technology and exclusive MSME offers.
During the year, Vi Business has been lauded with seven CIO Choice recognitions for our IoT, Cloud Telephony, SD-WAN, Rich Business Messaging, Telecom Carrier (Mobile Access), Telecom Carrier (International Access) services on the basis of an extensive Pan-India CIO referral voting process that spans across industry verticals. Your Company has been honoured as the Digital Transformation Enabler for its ReadyForNext Assessment for MSMEs. Adding more stars to glory, your Company has been awarded the Asian Telecom Awards 2024 for end-to-end multimodal logistic solution - Vi Business Sanchaar Shakti under the category IoT Initiative of the Year - India. Vi Business IoT Smart Central Platform too bagged a victory at the Voice & Data Excellence Awards 2023.
4. Driving Partnerships and Digital Revenue Streams
Your Company has entered into strategic collaborations with content providers, entertainment providers, financial institutions, network and IT vendors and e-commerce players. This network allows to combine expertise and resources, creating a powerful ecosystem that benefits all stakeholders, and enables your Company to deliver a differentiated experience. Further, the entertainment and media collaborations support ARPU growth through the delivery of an enhanced user experience. This enables your Company to combine its core strengths in connectivity and digital solutions with these collaborations, creating unique service offerings that address specific customer needs.
Vi Movies & TV was relaunched in a new avatar as a paid subscription service offering multiple OTTs under one plan, specifically targeting Smart TV consumers, who can get all their favourite OTTs through one plan. Company has brought 17 OTT partners onboard for this offering. Additionally, the subscription also allows access to 400+ TV channels. In order to offer a superlative viewing experience with a convenience of discovering all the content from the partner apps, all new mobile apps have been developed for both Android
& iOS as well as TV apps for multiple operating systems like Google TV, Samsung, Firestick & LG.
During the year, your Company enhanced its gaming proposition with the launch of multiplayer or social games on Vi App enabling users to play various games with their family or friends or compete in daily tournaments with other players on the platform. Your Company also launched eSports into Vi Games which is a growing phenomenon, especially amongst youth, in partnership with eSports start-up Gamerji. Your Company also launched CloudPlay as a subscription service, an offering on Cloud Gaming that allows consumers to play the best of the games without having to download and install them on their devices.
Your Company launched its own Ad-tech platform called `Vi Ads', which empowers marketers to engage with Vi users, as per their own targeting requirements, on both, Vi media assets as well as external media channels and publisher partners of Vi Ads. It is helping the Company drive the monetization of its digital users as the Company aggressively builds and scales its digital assets. Vi Ads is now empaneled with almost all the top media agencies and it is part of the media plan for some of the big brands in the country.
Your Company has also integrated `utility bill payment' functionality on Vi App enabling users to pay their electricity bills, water bills, LPG bills, recharge FASTAG, renew their DTH or broadband subscriptions or pay insurance premium / Loan EMIs. Further, leveraging telco data and access capabilities to create a Digital marketplace, your Company has launched `shop' section on Vi App in partnership with leading players across categories like entertainment, food, shopping and travel.
Further, your Company launched a converged proposition `Vi One' bundling mobility, fiber and over-the-top (OTT) subscriptions bringing convenience and value to the consumers under a single plan. It is the first industry for prepaid market. It has been launched across 3 circles of Mumbai, Maharashtra and Gujarat. While it is currently offered with its own You Broadband, your Company shall soon roll-out this proposition in other markets in partnership with other Broadband players.
On the back of all these digital initiatives, your Company has witnessed considerable growth in its
Monthly Average Users on the digital app. The focus on platform capabilities to build a digital ecosystem with the partners for a differentiated experience will help drive customer stickiness as well as provide incremental monetization opportunities. Based on the transformation Vi App has seen over the last year and a half, the customer ratings on Play Store have consistently improved.
Your Company has thus been making significant progress on various strategic initiatives and continues to strive towards transforming from a pure play mobile operator to a truly integrated digital service provider. Your Company is thus committed to delivering best-in-class services to their subscribers and bridging the digital divide that separates urban from rural.
As a result, your Company reported annual revenue and EBITDA (pre-IndAS 116) growth for the second consecutive year on the back of consistently improving performance for last several quarters despite significantly lower investments vs competition; clearly reflecting its ability to execute and compete effectively in this market. Your Company reported eleven quarters of sequential growth in key metrics of ARPU and 4G subscribers. Further, out of 3 private mobile operators your Company's share of gross ads is higher than its CMS showing that it is able to attract customers to its network. All of this is possible as your Company is following its well defined strategy and remained focus on providing great data and voice experience and is building a differentiated digital experience adding several digital offerings in the recent months.
Separately, your Company marked an important milestone in April 2024, by raising ' 180 billion through Further Public Offer (FPO), the largest FPO in the country. The overwhelming success of this FPO is testimony to the confidence and trust that has been reposed in your Company by each and every one of its investors who have rallied behind the Company us in large numbers leading to the issue being subscribed almost 7 times. In addition to FPO,
One of promoter group entity (Aditya Birla Group) contributed ' 20.8 billion through preferential issuance of equity shares at an issue price of ' 14.87 per equity share.
All the outstanding 16,000 Optionally Convertible Debentures (OCDs) amounting to ' 16 billion were converted into equity shares.
Additionally, the Company did preferential allotment for an aggregate consideration of ' 24.6 billion at an issue price of ' 14.80 per share to Nokia Solutions and Networks India Private Limited and Ericsson India Private Limited.
Considering all above, your Company has successfully raised equity of ~ ' 240 billion in calendar year 2024, including conversion of 16,000 OCDs amounting to ' 16 billion into equity shares.
FINANCIAL RESULTS AND SUMMARY
The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.
The standalone and consolidated financial highlights of your Company for the Financial Year ended March 31, 2024 are summarised as follows:
Particulars
Standalone
Consolidated
2023-24
2022-23
2023-24
2022-23
Income from sale of goods and
422,454
418,841
425,727
421,426
services
Other Operating Income
757
330
790
346
Other Income
614
2,707
1,132
3,113
Total Income
423,825
421,878
427,649
424,885
Expenses
258,009
256,412
255,257
253,602
EBITDA
165,816
165,466
172,392
171,283
Depreciation and Amortisation
219,883
223,622
226,335
230,497
EBIT
(54,067)
(58,156)
(53,943)
(59,214)
Finance cost
257,630
233,439
257,655
233,543
EBT
(311,697)
(291,595) (311,598)
(292,757)
Exceptional Items (Net)
7,555
(1,483)
7,555
(224)
Share of JV/Associates
-
-
(55)
5
Profit / (Loss) Before Tax
(304,142)
(293,078) (304,098)
(292,976)
Taxes
8,220
-
8286
35
Profit / (Loss) after Tax
(312,362)
(293,078) (312,384)
(293,011)
Standalone revenue of your Company stood at ' 423,211 Mn, an increase of 1.0% over previous year. The EBITDA stood at ' 165,816 Mn, registering an increase
of 0.2% over the previous year. The Loss after tax of the Company for the Financial Year 2023-24 stood at ' 312,362 Mn, vis-a-vis ' 293,078 Mn, for the previous year.
On a consolidated basis, the revenue of your Company stood at ' 426,517 Mn, an increase of 1.1% over the previous year. The EBITDA at ' 172,392 Mn reflects increase of 0.6% as compared to the previous year. The Consolidated Loss after tax of the Company stood at ' 312,384 Mn, for Financial Year 2023-24 vis-a-vis ' 293,011 Mn for the previous year.
Discussions on consolidated financial results
Revenue: Revenue from operations for the financial year ended March 31, 2024 increased by ' 4,745 Mn from ' 421,772 Mn for financial year ended March 31, 2023 to ' 426,517 Mn for financial year ended March 31, 2024, primarily due to improving subscriber mix, 4G subscriber additions and change in entry level plan.
Other Income comprising of interest income, gain on investments in mutual funds and others decreased by ' 1,981 Mn from ' 3,113 Mn for financial year ended March 31, 2023 to ' 1,132 Mn for financial year ended March 31, 2024.The decrease was primarily due to decrease in interest income by ' 2,038 Mn.
Operating Expenses: Total operating expenditure increased by ' 1,655 Mn from ' 253,602 Mn for financial year ended March 31, 2023 to ' 255,257 Mn for financial year ended March 31, 2024.
Cost of trading goods: Cost of trading goods increased by ' 78 Mn from ' 78 Mn for the year ended March 31, 2023 to ' 156 Mn for the year ended March 31, 2024 primarily due to an increase in volume of data cards sold during the year.
Employee Benefit Expenses: Employee benefit expenses increased by ' 2,561 Mn from ' 18,663 Mn for the year ended March 31, 2023 to ' 21,224 Mn for the year ended March 31, 2024 primarily due to increments in salary during the year.
Network Expense and IT Outsourcing Cost: Network Expense and IT Outsourcing Cost decreased by ' 2,679 Mn from ' 100,783 Mn for the year ended March 31, 2023 to ' 98,104 Mn for the year ended March 31, 2024 primarily due to decrease in power and fuel expenses, repairs and maintenance - plant and machinery expenses and Other network operating expenses.
License Fees and Spectrum Usage Charges (SUC):
License Fees and Spectrum Usage charges decreased by ' 3,295 Mn from ' 40,021 Mn for the financial year ended March 31, 2023 to ' 36,726 Mn for the financial year ended March 31, 2024, primarily due to decrease in SUC rates on account of acquisition of spectrum in August 2022.
Roaming and Access Charges: Roaming and Access Charges increased by ' 2,186 Mn from ' 38,991 Mn for the financial year ended March 31, 2023 to ' 41,177 Mn for the financial year ended March 31, 2024, primarily on account of increase in access charges including international termination charges.
Subscriber Acquisition and Servicing Expenditure:
Subscriber Acquisition and Servicing Expenditure, increased by ' 6,026 Mn from ' 36,780 Mn for financial year ended March 31, 2023 to ' 42,806 Mn for financial year ended March 31, 2024 primarily on account of higher amortization of contract cost capitalized based on assessment of customer life cycle
Advertisement, Business Promotion Expenditure and Content Cost: Advertisement, Business Promotion Expenditure and Content Cost decreased by ' 3,765 Mn from ' 9,412 Mn for financial year ended March 31, 2023 to ' 5,647 Mn for financial year ended March 31, 2024 due to a decrease in content cost and advertisement and business promotion expenditure during the year.
Other Expenses: Other expenses increased by ' 543 Mn from ' 8,874 Mn for financial year ended March 31, 2023 to ' 9,417 Mn for financial year ended March 31, 2024 primarily due to higher provision for doubtful debts and advances and travel and conveyance cost
The composition of total operating expenses (amount and percentage to total operating expenses) are as follows:
Composition of Operating Expenses
9,417
5,647 4%S
| Cost of trading goods ' 156 Mn (0%)
21,224 | Employee benefit expenses
/~A
| Network expenses and IT outsourcing cost
42l8%6 1
License fees and spectrum usage charges
| Roaming and access charges
r
1 | Subscriber acquisition and servicing
41,177^
expenditure
16%
| Advertisement, business promotion
expenditure and content cost
/
' \ | Other expenses
36,726
98,104
14%
39%
Earning before Finance Costs, Depreciation, Amortisation, Exceptional Items and Taxes (EBITDA): The EBITDA has increased by ' 1,109 Mn from ' 171,283 Mn for financial year ended March 31, 2023 to ' 172,392 Mn for financial year ended March 31, 2024. EBITDA as a percentage of total Income remains at 40.3% for financial year ended March 31, 2024 and March 31, 2023.
Depreciation, Amortisation and Finance Costs:
The depreciation charge for the year has decreased by ' 3,869 Mn from ' 142,584 Mn for financial year ended March 31, 2023 to ' 138,715 Mn for financial year ended March 31, 2024.The amortisation charge for the year has decreased by ' 293 Mn from ' 87,913 Mn for financial year ended March 31, 2023 to ' 87,620 Mn for financial year ended March 31, 2024.
Finance Charges for financial year ended March 31, 2024 increased by ' 24,112 Mn from ' 233,543 Mn to ' 257,655 Mn, primarily due to increase in interest on deferred payment obligation towards spectrum and AGR dues and interest on accrual towards one time spectrum charges (OTSC).
Exceptional Items: Exceptional Items for the year ended March 31, 2024 amounts to ' 7,555 Mn arising out of the Telecom Disputes Settlement and Appellate Tribunal ruling and accepted by the Department of Telecommunications.
Profits and Taxes: The loss before tax for the financial year ended March 31, 2024 stood at ' 304,098 Mn as compared to a loss of ' 292,976 Mn for financial year ended March 31, 2023. The loss after tax for financial year ended March 31, 2024 stood at ' 312,384 Mn as compared to a loss of ' 293,011 Mn for financial year ended March 31, 2023.
Capital Expenditure: During the financial year 2023-24, the capital expenditure (including capital advances and excluding RoU assets and Spectrum) incurred was ' 16,967 Mn. Further, the Company has incurred ' 1,520 Mn towards Bandwidth. In addition to this, the Company has acquired spectrum of ' 149 Mn.
Balance Sheet: The Gross and Net Block of Property, Plant and Equipment and Intangible assets (including Capital Work in Progress and Intangible Assets under development) stood at ' 3,311,617 Mn and ' 1,583,139 Mn respectively. Investment in joint venture and associate stood at ' 3 Mn (net of provision for impairment). Non-current and
current financial assets decreased by ' 20,241 Mn from ' 119,089 Mn to ' 98,848 Mn primarily due to reduction in settlement asset and balances with banks in current accounts. Other Assets (Non-current and current) decreased by ' 43,980 Mn from ' 211,336 Mn to ' 167,356 Mn primarily due to reduction in advance tax, payment under protest and GST recoverable. Deferred tax assets as at March 31, 2024 stood at ' 138 Mn as compared to ' 135 Mn as at March 31, 2023. Assets classified as held for sale (AHFS) stood same at ' 493 Mn as at March 31, 2024 and March 31, 2023.
The paid-up equity share capital of the Company increased by ' 14,401 Mn during the year pursuant to issuance of 1,440,000,000 equity shares of face value of ' 10/ each at an issue price of ' 10/- per equity share to ATC as part of conversion of 14,400 OCDs and pursuant to issuance of 131,170 equity shares to the employees on exercise of stock options granted under Employee Stock Option Scheme, 2013.
Other equity of the Company decreased from ' (1,230,388) Mn for Financial Year ended March 31, 2023 to ' (1,542,866) Mn for Financial Year ended March 31, 2024 mainly due to net loss during the year ' 312,384 Mn.
As on March 31, 2024, the total equity stood at ' (1,041,668) Mn as compared to the total equity of ' (743,591) Mn for Financial Year ended March 31, 2023.
Long term and short term borrowings increased by ' 60,438 Mn and stood at ' 2,076,298 Mn as on March 31, 2024 primarily due to annual accrued interest addition on spectrum and AGR obligation which is offset by repayment of bank loans and conversion of ATC OCDs into equity shares.
Non-current and other current financial liabilities decreased by ' 5,821 Mn and stood at ' 724,223 Mn for financial year ended March 31, 2024 primarily due to increase in accrual towards One Time Spectrum Charges (OTSC), payables for capital expenditure, interest accrued but not due, security deposits from customers and others and trade payables which is primarily off-set by decrease in settlement liability.
Non-current and other current Liabilities and Provisions increased by ' 9,364 Mn and stood at ' 91,120 Mn for the financial year ended March 31, 2024 mainly due to increase in Current tax liability and taxes, regulatory and statutory liabilities.
Deferred tax liability as at March 31, 2024 stood at ' 4 Mn.
Cash Flow Statement: The cash generated from operations of ' 208,261 Mn, proceeds from borrowings of ' 20,000 Mn, interest received of ' 422 Mn, Net sale of current investments amounting to ' 237 Mn, Maturity Fixed Deposits with banks having maturity of 3-12 months of ' 55 Mn and proceeds from issue of shares under Employee Stock Option Scheme (ESOS) of ' 1 Mn which was primarily used for repayment of lease liabilities and borrowings of ' 181,126 Mn, payment of interest and finance charges ' 28,678 Mn, payment towards capital expenditure (net of sale proceeds) ' 15,299 Mn, payment of deferred payment obligation towards spectrum of ' 4,483 Mn. Consequently, Cash and Cash Equivalents as at March 31, 2024 stood at ' 1,678 Mn.
Significant Changes in Key Financial Ratios Based On Standalone Financials
The key financial ratios are as under:
Particulars
2023-24
2022-23
Debtors Turnover Ratio (number of days)(1)
18
20
Current Ratio(2)
0.34
0.38
Debt Equity Ratio(3)
(2.01)
(2.73)
Debt Service Coverage Ratio (`DSCR')(4)
0.24
0.25
Interest Service Coverage Ratio (`ISCR')(5)
0.30
0.33
Operating Profit Margin (%)(6)
-13%
-15%
Net Profit Margin (%)(7)
-74%
-70%
Return on Net Worth (%)(8)
NA(8)
NA(8)
1 Debtors Turnover Ratio (number of days) = [(Average trade receivables)/(Revenue from operations)*Number of days during the year]
2 Current Ratio = Current asset/ Current liabilities (excluding Short term borrowings)
3 Debt Equity Ratio = Debt (excluding interest accrued but not due)/ Equity
4 DSCR =[Profit/(loss) before exceptional items and tax + Depreciation & Amortisation expenses (excluding depreciation on ROU assets) + Finance costs (excluding fair value gains/losses on derivatives and interest on lease liabilities)] / [Finance costs (excluding fair value gains/losses on derivatives and interest on lease liabilities) + interest capitalised + scheduled long term principal repayments (excluding prepayments)]
5 ISCR = [Profit/(loss) before exceptional items and tax + Depreciation & Amortisation expenses (excluding depreciation on ROU assets) + Finance costs (excluding fair value gains/losses on derivatives and interest on lease liabilities)] / [Finance costs (excluding fair value gains/losses on derivatives and interest on lease liabilities) + interest capitalised]
6 Operating Margin (%) = [Profit/(loss) before exceptional items and tax + Finance costs - Other Income] / Revenue from Operations
7 Net Profit Margin (%) = Net Profit/(loss) after tax /Revenue from operations
8 As the Net-worth is negative as on March 31, 2024 and March 31, 2023, hence not calculated.
DIVIDEND
As your Company has incurred net loss during the Financial Year 2023-24, your Directors have not recommended any dividend for the year.
TRANSFER TO RESERVES
During the Financial Year under review, the Board has not proposed to transfer any amount to Reserves.
CHANGES IN SHARE CAPITAL
During the year under review, your Company issued and allotted 131,170 Equity Shares of ' 10/- each, fully paid-up, to the RSU grantees pursuant to the exercise of Restricted Stock Units (RSU's) by the eligible employees under the Employee Stock Option Scheme, 2013 (ESOS-2013).
Further, pursuant to the exercise of option attached to the Optionally Convertible Debentures (OCDs), by the OCD Holder, issued by the Company in previous financial year 2022-23, the Board of your Company allotted 144,00,00,000 equity shares of face value of ' 10/- each on March 23, 2024, at an issue price of ' 10/- per equity share against the conversion of 14,400 OCDs.
Consequent to the above, the issued, subscribed and paid-up equity share capital of your Company as on March 31, 2024 stood at ' 501,198 Mn comprising of 50,119,820,375 Equity Shares of ' 10/- each.
Post the end of the financial year the following changes took place in the capital structure of the Company:
- Pursuant to the resolution(s) passed by the board of directors on February 27, 2024, and by the shareholders on April 2, 2024, your Company approved its Further Public Offering ("FPO") of equity shares aggregating to ' 180,000 million. Pursuant to the Red Herring Prospectus (RHP) dated April 11, 2024 and Prospectus dated April 22, 2024, the Company on April 23, 2024 issued and allotted 16,36,36,36,363 Equity Shares of
face value ' 10/- each at an Offer price of ' 11/- per Equity Share (including a premium of Re. 1 per Equity Share), aggregating to ' 180,000 million.
- Pursuant to the resolution(s) passed by the board of directors on April 6, 2024 and by the shareholders' on May 8, 2024, your Company on May 21, 2024, allotted 1,39,54,27,034 equity shares at an issue price of ' 14.87 per Equity Shares aggregating to ' 20,750 million on preferential basis to Oriana Investments Pte. Ltd. a Promoter Group on preferential basis.
- Further, pursuant to the exercise of option attached to the Optionally Convertible Debentures (OCDs), by the OCD Holder(s), issued by the Company in previous financial year 2022-23, the Board of your Company allotted 16,00,00,000 equity shares of face value of ' 10/- each on July 12, 2024, at an issue price of ' 10/- per equity share against the conversion of balance 1,600 OCDs. With the said conversion, all outstanding OCDs stand converted into equity shares.
- Pursuant to the resolution(s) passed by the board of directors on June 13, 2024 and by the shareholder's on July 10, 2024, your Company on July 18 and July 19, 2024, allotted 1,66,08,10,804 equity shares at an issue price of ' 14.80 per Equity Shares to Nokia Solutions and Networks India Private Limited (1,02,70,27,024 Equity Shares) and Ericsson India Private Limited (63,37,83,780 Equity Shares), vendors of the Company, aggregating to ' 24,580 million on preferential basis.
- Also, on July 29, 2024, 122,064 equity shares were allotted pursuant to exercise of Restricted Stock Units granted to eligible employees under Company's Employee Stock Option Scheme - 2013.
Consequent to the aforesaid issuance, the issued, subscribed and paid-up equity share capital as on date of this report stands at ' 696,998 million comprising of 69,69,98,17,180 equity shares of ' 10/- each.
Further post end of the Financial Year, the Authorised Share Capital of the Company was increased from existing ' 750,000 million to ' 1,000,000 million.
CASH, DEBT AND GOI OBLIGATION
On a standalone basis, the Company had Cash and Cash Equivalents of ' 1,542 Mn and Fixed Deposits with
banks having maturity of 3 to 12 months of ' 2 Mn as on March 31, 2024. The total debt from banks and financial institutions stood at ' 40,362 Mn, Inter-company loan stood at ' 2,556 Mn and Optionally Convertible Debentures at ' 1,600 Mn as of March 31, 2024. The payment obligations to the Government stood at ' 2,034,336 Mn as of March 31, 2024 including deferred spectrum payment obligations of ' 1,331,140 Mn and AGR liability of ' 703,196 Mn.
On a consolidated basis, the Company had Cash and Cash Equivalents of ' 1,678 Mn and Fixed Deposits with banks having maturity of 3 to 12 months of ' 4 Mn as on March 31, 2024. The total debt from banks and financial institutions stood at ' 40,362 Mn and Optionally Convertible Debentures at ' 1,600 Mn as of March 31, 2024. The payment obligations to the Government stood at ' 2,034,336 Mn as of March 31, 2024 including deferred spectrum payment obligations of ' 1,331,140 Mn and AGR liability of ' 703,196 Mn.
All scheduled loan repayments were made on respective due dates.
During the year, the Company had availed a Short Term Loan of ' 20,000 Mn.
CREDIT RATING
As on March 31, 2024, the rating of Long Term Bank Facilities is CARE B+ (Stable) and Short Term Bank Facilities is Care A4. During the year under review, the Company has retired all outstanding Non-Convertible Debentures and thus no rating is included in that regard.
Following the equity raise and other developments, the credit rating of the Long Term Bank Facilities stands upgraded to CARE BB+ (Stable) and Short Term Bank Facilities to A4+, as of date of this report.
CAPITAL EXPENDITURE
On a standalone basis, the capital expenditure (including capital advances and excluding RoU assets and Spectrum) incurred was ' 15,360 Mn in the Financial Year 2023-24. Further, the Company has incurred ' 1,520 Mn towards Bandwidth. In addition to this, the Company has acquired spectrum of ' 149 Mn. Further, on a consolidated basis, the
capital expenditure (including capital advances and excluding RoU assets and Spectrum) incurred was ' 16,967 Mn in the Financial Year 2023-24. Further, the Company has incurred ' 1,520 Mn towards Bandwidth. In addition to this, the Company has acquired spectrum of ' 149 Mn.
FIXED DEPOSITS
Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding, as on the date of the Balance Sheet.
SIGNIFICANT DEVELOPMENTS
Further Public Offering:
Post the end of the financial year, your Company successfully completed capital raising of ' 180,000 million by way of Further Public Offering (`FPO') by way of fresh issue of 16,36,36,36,363 Equity Shares of face value ' 10/- each at an Offer price of ' 11/- per Equity Share (including a premium of Re. 1 per Equity Share). The Issue was made through book building process in accordance with regulation 129(1) of the SEBI ICDR Regulations, which opened on April 18, 2024 and closed on April 22, 2024 and the allotment was completed on April 23, 2024.
The FPO of the Company received strong support from investors and the issue was oversubscribed by 6.97 times. Post the completion of the FPO, the shareholding of the Promoter/Promoter Group reduced from 48.91% to 36.87%.
AGR Matter
The Hon'ble Supreme Court had upheld the view considered by Department of Telecommunications ("DoT") in respect of the definition of Adjusted Gross Revenue ("AGR") ("AGR Judgment") and confirmed the principal demand, levy of interest, penalty and interest on penalty resulting in significant financial implications on the Company. The Hon'ble Supreme Court also had vide its final order dated September 1, 2020, inter-alia directed that telecom operators shall make payments in ten instalments commencing from April 1, 2021 to March 31, 2031 payable by 31st March of every succeeding financial year and file an yearly affidavit confirming compliance.
The Company had on August 10, 2021 filed a review petition with the Hon'ble Supreme Court for considering to hear the modification application on correction of manifest/clerical/arithmetic errors in the computation of AGR demands which is still pending to be heard.
The Union Cabinet on September 15, 2021 approved major structural and process reforms in the telecom sector to boost the proliferation and penetration of broadband and telecom connectivity. Further to address liquidity requirements, the Cabinet had also approved deferment of AGR dues which are payable in annual instalments as determined by the Hon'ble Supreme Court for up to four years without any change in the instalment period and deferment of spectrum auction instalments payable from October 1, 2021 to September 30, 2025 excluding the instalments due for spectrum auction conducted in 2021. It also provided upfront conversion on any of the interest amount arising due to such deferment into equity on an Net Present Value (NPV) basis. The Company had conveyed its acceptance for the deferment of Spectrum Auction instalments and AGR Dues by a period of four years and on January 10, 2022 conveyed its acceptance for conversion of such interest on the deferred instalments related to deferred annual spectrum liabilities and AGR dues into shares in the Company.
Subsequently on April 14, 2022, the Company confirmed the computation of the Net Present Value (NPV) of the interest liability on moratorium period amounting to ' 161,331 Mn towards AGR dues and deferred annual spectrum liabilities respectively as on the date of exercise of option i.e. January 10, 2022. The DoT, on February 3, 2023, issued an order under section 62(4) of the Companies Act, 2013, directing the Company to convert the loan representing NPV of the interest related to such deferment amounting to ' 161,332 Mn into Equity Shares. On February 7, 2023, the Company's Board approved the allotment of shares to Government of India.
During the previous financial year 2022-23, the DoT offered a moratorium on pending AGR related dues up to Financial Year 2018-19 along with an option of equity conversion of interest liability pertaining to the moratorium period for the additional amount of
' 88,372 Mn (including additional amounts for the period till Financial Year 2016-17 not forming part of the affidavit submitted to Supreme Court). On June 29, 2022, Company conveyed its acceptance for the deferment of AGR related dues for the period beyond Financial Year 2016-17 and till Financial Year 2018-19 as the figures till Financial Year 2016-17 were to be treated as final without any changes as per the AGR judgement. The DoT has also mentioned that these demands are subject to further correction on account of disposal of various representations submitted by the Company, outcome of other pending litigations etc. and the undisputed amounts finally determined by December 31, 2025 shall be paid in six equal instalments post the moratorium period. In September 2022, the Company informed the DoT that on the interest for the moratorium period on these yet to be finalized AGR dues beyond Financial Year 2016-17 till Financial Year 2018-19, it shall not be opting for conversion into equity.
Accordingly, as at March 31, 2024, the net liability towards AGR dues arising out of Honourable Supreme Court judgment amounting to ' 703,196 Mn (net of payment of ' 78,544 Mn) is disclosed as deferred payment obligation pursuant to AGR judgement under long term borrowings in the financial statements.
One Time Spectrum Charge Matter
In respect of levy of One Time Spectrum Charge (`OTSC'), the DoT has raised demand on the Company and erstwhile Vodafone India Limited (VInl) and Vodafone Mobile Services Limited (VMSL) in January 2013 for spectrum beyond 6.2 MHz in respective service areas for retrospective period from July 1, 2008 to December 31, 2012 and for spectrum held beyond 4.4 MHz in respective service areas effective January 1, 2013 till expiry of the period as per respective licenses. In the opinion of the Company, the above demand amounts to alteration of financial terms of the licenses issued in the past and therefore the Company filed a petition in the Hon'ble High Court of Bombay, which vide its order dated January 28, 2013, had directed the DoT to respond and not to take any coercive action until the next date of hearing. Similarly erstwhile VInl and VMSL had filed a petition before the
Hon'ble Tribunal Telecom Disputes Settlement and Appellate Tribunal (TDSAT) which vide its order dated July 4, 2019 held that for spectrum below 6.2 MHz, OTSC is not chargeable and accordingly demand is set aside. For spectrum beyond 6.2 MHz, if spectrum is allotted after July 1, 2008, OTSC shall be levied from the date of allotment of such spectrum and if spectrum is allotted before July 1, 2008, OTSC shall be levied from January 1, 2013 till the date of expiry of licenses and ordered DoT to issue revised demands, if any, as per terms of direction given. The Company's appeal before the Hon'ble Supreme Court for levy of OTSC beyond 6.2 MHz, though initially dismissed was reinstated following a review petition filed in this regard. The DoT has also preferred an appeal against the TDSAT judgement for levy of OTSC on spectrum below 6.2 MHz. The matter is currently pending before the Hon'ble Supreme Court.
Tax Treatment of Revenue Share License Fee Judgement
On October 16, 2023, the Supreme Court of India ruled that the tax treatment of the annual revenue share license fee ("RSLF") paid by telecommunication license holders to the Department of Telecommunications ("DoT") needed to be similar to the tax treatment as applicable for the upfront fee payable at the time of acquisition of such a license (the "RSLF 2023 Supreme Court Judgement").
For taxation purposes, the RSLF amount reflected in the profit and loss was being claimed as a period expense. However, following the RSLF 2023 Supreme Court Judgement, the Company was required to recompute the tax treatment of RSLF on a staggered basis for the term for all telecom licenses held by us. While this does not result in any permanent tax disallowance, this will however result in a lower taxable deduction during the initial period of the license and a higher taxable deduction during the latter period of the license.
Over the years, the Company acquired several telecommunication licenses from the DoT and also acquired other telecommunication companies that held active telecommunication licenses from the DoT, which have been merged into your Company. Based on
initial evaluation and after considering the allowable deductions for the periods and on a best estimate basis, a tax provision of ' 8,220 Mn and interest of ' 2,630 Mn are recorded under Current tax and Finance costs respectively, and corresponding effect has been recorded as Current tax liability of ' 5,217 Mn and adjusted ' 5,633 Mn in Other Non-Current Assets in the financial statements.
TDSAT Judgement
On July 23, 2018, the Company had paid an amount of ' 39,263 Mn under protest for the differential amount of entry fees paid and market determined price of 4.4 MHz, as demanded by the DoT. The Company had thereafter filed a petition with TDSAT disputing ' 13,636 Mn as excess amount calculated by the DoT. The DoT accepted the Company's contention to the extent of ' 7,555 Mn resulting in TDSAT issuing order dated December 15, 2023, directing the DoT to adjust this amount. The DoT vide letter dated December 27, 2023 has communicated such adjustment.
Spectrum Auction
DoT had issued the Notice Inviting Applications (NIA) on 8th March 2024 for Auction of Spectrum in 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26 GHz Bands. The spectrum auction commenced on 25th June 2024 and concluded on 26th June 2024 after 7 rounds of bidding spread over 2 days. The total spectrum placed for auction was valued at ~ ' 962 billion at reserve price. The cumulative pay-out by the Industry was ~ ' 113 billion.
REGULATORY DEVELOPMENTS
The Telecommunications Act, 2023: On
December 24, 2023, the Telecommunications Act 2023 was published. The objective of the Act is to amend and consolidate the law relating to development, expansion and operation of telecommunication services and telecommunication networks, assignment of spectrum and other connected matters. This Act will replace the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933 and the Telegraph Wires (Unlawful Possession) Act, 1950. Key highlights of the
Act include provisions on:
- Legal enforceability of Right of Way permissions, processes & procedures;
- Assignment of spectrum;
- Protection of Telecom Network and Services;
- Protection of Users as also Duty of Users;
- Introduction of a Central adjudicatory mechanism before an appeal can be preferred to the Telecom Dispute Settlement and Appellate Tribunal;
- Rationalization of penalties, including enunciation of the principles to be kept in mind whilst determining penalties.
Rules in respect of the various provisions of the Act are yet to be formulated. The Company welcomes the Act and sees it as an important milestone in the development of a future ready legal framework paving the way for next generation infrastructure development.
Provisional Assignment of Expiring Spectrum:
As the spectrum assigned administratively to the Company was expiring prior to the spectrum auctions, that are now scheduled for June 2024, DoT decided to permit the Company to retain its spectrum till the conclusion of the auction process subject to payment of a provisional price for the retained spectrum, which would be adjusted based on final price discovered through the auction process. It was also clarified that in case the incumbent TSP does not win back the spectrum, a maximum transition period of two months will be given to the incumbent TSP. Accordingly, the Company has provisionally extended 5MHz spectrum in Uttar Pradesh (West) and 4.4MHz spectrum in West Bengal in the 900MHz band.
Amendment to Subscriber Verification Guidelines: On August 21, 2023, the DoT issued instructions making it mandatory for the licensees to register each Point of Sale (franchisee, agent, distributor) before permitting them to enroll customers. On August 31, 2023, the DoT issued instructions mandating End-user KYC for all business connections. The DoT has also issued instructions for discontinuation of paper-based KYC effective January 1, 2024.
Digital Personal Data Protection Act, 2023:
On August 11, 2023, the government notified the Digital Personal Data Protection Act to provide for the processing of digital personal data in a manner that recognizes both the right of individuals to protect their personal data and the need to process such personal data for lawful purposes and other connected matters. The Act is based on the principles of consented, lawful and transparent use of personal data; purpose limitation; data minimization; data accuracy; storage limitation; reasonable security safeguards and accountability. The Act lays down the obligations of a Data Fiduciary, the Rights and duties of a data Principal, grievance redressal mechanism, setting up of a data protection board, penalties in respect of various breached. Rules in respect of various provisions of the Act are yet to be formulated. The Company is already required under licensed to maintain confidentiality of its subscriber data. The Company welcomes the Act and sees it as an important step towards a uniformly applicable approach for ensuring protection of personal data of the consumers.
Introduction of Calling Name Presentation (CNAP) Service in Indian Telecommunication Network: TRAI submitted its recommendations to DoT on February 23, 2024, that CNAP Supplementary Service should be introduced in Indian telecom network and all access service providers should provide this service to their subscribers upon their request and that the name provided by subscribers in the Customer Application Form (CAF) should be used for this purpose. TRAI also recommended that the technical model for implementation be tested in 1 LSA with subscriber base of each TSP prior to pan-India implementation of this service and that after acceptance of these recommendations by the Government, appropriate instructions be issued to make CNAP feature available in all devices sold in India with a suitable cut-off date. A trail for assessing Proof of Concept is being planned by DoT.
Telecommunication Infrastructure Sharing, Spectrum Sharing, and Spectrum Leasing: On
April 24, 2024 TRAI submitted its recommendations to DoT on Infrastructure Sharing, Spectrum Sharing, and Spectrum Leasing. Key recommendations include
mandatory roaming, sharing of infrastructure in cases where the projects have been partially or fully funded by Government through the USO Fund and allowing inter-band spectrum sharing and spectrum leasing. In addition, TRAI has recommended DoT to explore possibility and conduct field trials with willing TSPs for allowing Authorized Shared Access (ASA) of spectrum assigned to Government agencies/other entities, for secondary use to TSPs. Final decision in this regard will be taken by DoT.
Digital Consent Acquisition: On June 2, 2023, TRAI issued a Direction regarding implementation of Digital Consent Acquisition (DCA) under Telecom Commercial Communications Customer Preference Regulations 2018 (TCCCPR 2018) which envisages creation of a uniform platform and process to register customer's consent digitally across all service providers and Principal Entities.
BRAND OVERVIEW
The brand VI of your Company has completed over 3 years. In this short journey, the brand has already garnered strong awareness and continues to build brand affinity & consideration across all customer segments in the country.
Your brand's health has improved significantly as reflected in brand NPS as well as on key KPIs like Spontaneous Awareness & Total Awareness. It has also shown significant improvements across many other brand Imagery Parameters. Further, your Company continued to grow on its NPS (Net Promoter Score) - a mark of its splendid customer service being appreciated whole-heartedly by its users.
Your Company also continued its numero uno position on the Social Media front with the credit of being the only telco with +ve NPI (Net Positivity Index) and a whopping 86% SoPV (Share of Positive Voice) on Social Media amongst all the telco brands in the country.
MARKETING AND OTHER INITIATIVES
Building upon the success of the previous year, your Company has elevated both product and marketing differentiation to new heights, offering unique and industry-first digital solutions to our customers.
Your Company launched `Be Someone's We campaign,
rooted in the company's vision of being a partner to its customers; in building a better today and a brighter tomorrow. This is relevant in today's world as several studies indicate that people from all walks of life, especially the GenZ & millennials are struggling with challenges such as loneliness and social isolation; impacting their overall well-being. The campaign focused on deepening emotional affinity to build positive momentum and consumer connect for Vi. This campaign was promoted across TV, digital and on-ground. To exhibit being someone's we, various on-ground engagements were carried with NGOs, old age homes etc. to celebrate the brand's promise with people who feel lonely. The employees, along with more than 500 kids from NGOs created a Guinness World Record for largest notebook sentence, with 23K+ notebooks across llakh sq.ft to generate awareness of `Be Someone's We'. These notebooks were then distributed amongst the children, bringing a smile on their faces.
Vi also did a Human Network Testing Network Campaign in Mumbai as a challenge to cater to the crucial connectivity requirement for the constantly moving Mumbaikars. Vi partnered with Mumbai's best human network, the Dabbawalas, who know the city like no other, to test Vi's network and thereby help to improve the network for offering a superior network experience to its users. The dabbawalas torture tested Vi GIGAnet across 22 wards and over 550 locations, covering the length and breadth of Mumbai which helped us understand where the network was seamless and where it needed strengthening. They tested the network on data as well as voice through voice calls & video calling, video streaming, online gaming & speed tests etc. Based on their feedback, a team of Vi network engineers continued to reinforce the network in the locations needing a stronger experience. Today, we are confident that Vi offers superior network connectivity across the nooks & corners of the city & the dabbawalas are testimony to it. This campaign was promoted across TV, digital and on ground.
A pilot run of our new convergence proposition, Vi One, was conducted by your Company, in collaboration with You Broadband. Vi One seamlessly integrates high-speed broadband, OTT subscriptions, and prepaid
mobile connections into one offering, with tests conducted across Maharashtra and Gujarat markets.
Responding to the ever-increasing data demands and evolving usage patterns, your Company introduced new data packs such as Super Hour, Super Day, and Chhota Hero, tailored to meet the needs of today's users. These packs were strategically promoted in below-the-line activities within high data consumption markets, resulting in significant growth in consumption.
During the roaming season, your Company reached new milestones with innovative products in the prepaid portfolio and continued to differentiate itself in the industry with Truly Unlimited Data and Calls for postpaid roaming. New packs were extensively promoted across target groups through digital campaigns and a unique partnership with MakeMyTrip.
Putting customers at the forefront of our business, your brand launched Vi Thank You, a distinctive initiative aimed at expressing gratitude to our customers for their contributions to society and the country. Additionally, Vi Priority, a priority customer care service, was introduced for selecting long-standing network users and premium postpaid customers.
To further enhance our postpaid offerings, your Company introduced the `Choose Your Benefit' feature on Vi Max postpaid plans, allowing customers to personalize their plans by selecting benefits from various categories such as OTT, travel, food, and mobile security. This pioneering move, accompanied by visually striking and innovative TV creative promotions, challenged the industry norms of one-size-fits-all plans.
Lastly, your Company unveiled Vi Movies and TV in a revamped avatar as a connected TV application, available on various platforms including Android, Google TV, Firestick, and Samsung Smart TVs. This comprehensive app aggregates content from 13 OTT platforms and 400 TV channels, providing users with a seamless entertainment experience.
On the Digital front, your Company continued to further strengthen its flagship Digital Asset - Vi App. With an objective to increase customer engagement and herald a new Digital ecosystem, your Company has transitioned Vi app into multifaceted super app which now provides
its customers with a large repertoire of telco++ services like - Live TV, Movies & Web-Series, Casual Online Games, eSports, Cloud Games, Utility Bill Payments & OTT & other Digital subscriptions. Through Vi App, your Company has also significantly scaled online recharge sales for its prepaid plans, new postpaid customer acquisition, sale of international roaming packs as well as service requests being made on Vi App by both, prepaid & postpaid customers.
Vi Movies & TV - our OTT App has also been integrated with Vi App giving customers access to their favorite shows & movies right on Vi App itself. And to provide the best in class content, the Company partnered with various content creators and OTT apps like SonyLiv, Hotstar, Zee5, SunNXT, ShemarooMe, Hungama, TV Today, Atrangi, Nammaflix, Klikk, Choupal, Playflix, Fancode and others. The app provides a range of content including Movies, TV shows & Live TV from over 400 TV channels, original shows and short format videos in 16+ languages. It has rich content ranging from GEC (general entertainment), news, religious, regional, documentaries, sports & kids. Vi Movies & TV also offers a combo plan to users wherein they get 13 OTT subscriptions & access to 400+ TV channels through a single plan.
With the objective of driving high-end/heavy data users with premium content, the Company also has product bundling tie ups with leading content providers like Disney+ Hotstar, Amazon Prime, SonyLiv & SunNXT.
Your Company has also integrated an eSports platform in partnership with one of the leading eSports start-up, Gamerji. Vi's eSports platform allows consumers to participate in eSports tournaments across some very popular titles like Free Fire Max, Call of Duty, Asphalt9 & more. Your Company also expanded Vi Games proposition with the launch of Social or Multiplayer games offering that included popular games like Ludo, Solitaire, Rummy, TeenPatti, Uno, Cricket, Football, Wordle & more. Extending its play into gaming, your company launched Cloudplay - a cloud gaming service, in partnership with a French gaming company, CareGame. Cloudplay boasts of a rich highly advanced game catalogue allowing users to play high-end gaming without having to download or install a game on their devices.
With the objective of driving Data & Media monetization, your Company had also commissioned its AI/ML driven adtech platform. Launched under the brand \Jl Ads, it offers advertisers unique audience segments, interest groups &
targeting parameters and advertising opportunity across all telco owned channels as well as 3rd party digital inventory under a single platform, thereby simplifying media buying, especially for the SMBs.
Your Company, last year, had also commissioned a state-of-the-art Consumer & Marketing Analytics Platform
- India's 1st Big Data AI/ML & Advanced Cloud Analytics Platform among Telcos, which now gives us the capability to compute and process at scale apart from the ability to also access open source knowledge banks. This has enabled us to entrust the task of defining the next best action (NBO) to machines and has really helped enhance outcomes of CVM machinery through sharper targeting and targeted offerings with significant uptake in revenue & adoption/acquisition counts. Your Company won the prestigious Frost & Sullivan award in the telco category for leading Artificial Intelligence & Machine Learning practices and their application across Indian Telecom Service Providers.
Launch of Self KYC for Prepaid and Postpaid Home Delivery
Vi was the first operator in the industry to launch the Self KYC (Know Your Customer) process for Prepaid and Postpaid in March 2023. The Self KYC process made the customer on-boarding faster and easier as customers were no longer required to visit the retail store and go through the physical KYC process. This is currently available in 9 circles - DEL, MUM, KOL, KAR, GUJ, MNG, RAJ, HAR & Assam. The service will be further expanded to 4 more circles in the coming months - APT, UPE, ROB & TNC.
Your Company launched another Industry First proposition
- Vi Max Postpaid Choose Your Benefit (CYB) offering consumers a choice amongst OTTs, Travel, Food & Device security. This is first of its kind globally wherein Postpaid customers can choose benefits of their liking from a wide range of non telco options across various categories of OTT Entertainment, Travel, Food and Device security. This led to a significant increase in Gross acquisition on Postpaid and reduction in churn leading to positive net adds on a consistent month on month basis.
Vi launched a slew of initiatives to fuel growth in the IR business in the last financial year. A new IR portfolio was launched to democratize roaming experience through affordable packs at ' 133/day. Vi expanded the IR Pack
country footprint to cover 115+ destinations which include high footfall ones such as Maldives & Azerbaijan and launched Volte services in USA/Australia/Japan to offer seamless voice experience.
Big Data, Advanced Analytics (Artificial Intelligence & Data Science) and Business Intelligence Edge
Vi launched India's 1st Big Data AI/ML Cloud Advanced Analytics Platform over AWS Cloud enabling massive parallel voluminous big data processing for smarter and faster marketing interventions & plan recommendation generated by our Data Science & AI/ML based predictive & prescriptive models. Enhancing business growth both for its Prepaid & Postpaid business offerings especially in UL Recruitment, UL Renewals, Plan Upgrades especially Long Validity Plan Upgrades & Upsell / Cross Sell, Churn Reduction, Digital Adoption / Engagement, International Roaming (IR) offerings, curbing hoppers subscribers, enhancing family plan adoptions and is indeed a step taken forward in our journey of transition from Telco-Techco. Thereby, migrating from conventional ML algorithms to Deep Learning & Generative AI Algorithms on extensive and varied datasets necessitates significant computing and processing power.
While promoting purposeful innovations in AI and Data Science, the Company has roadmap to improve customer experience and business value. For instance, it conducts research and development (R&D) experiments on unstructured data, including text, speech, image, and video analytics to build value-impacting use cases such as improvements in digital assistants (GPT3), content recommendation, photo/movie resolution improvement, smart augmented reality/virtual reality use cases for field training etc.
Our Artificial Intelligence & Data Science driven Big Data Analytics Platform brings in massive parallel processing & compute capability enabling faster GTM along with speed, scale capability across multiple AI/ML Models to run on Pan-India subscriber base at once. It also enables enterprise grade Real-Time Stream Analytics Capability in defining and deploying AI/ML Use Cases and Models along with Gen AI capabilities across Large Language Models (LLMs), Visual Data Synthesis & Intelligence and Audio/Speech Analytics.
Vodafone Idea's state-of-the-art team with its in-house trained and skilled Data Scientists, AI Engineers, Business Intelligence experts, Cloud computing engineers combined with its cutting-edge cloud technology stack continues to build, refines, tracks, and updates tailored AI and Data Science models for hyper-personalization & automation of need basis customer behavior, customer feedback, and social media inputs such as text/logs, voice/speech, images/videos, and reliable external data parameters.
Today our Big Data Analytics Platform enables enhanced Customer Acquisition, Engagement, Retention, Digital/ Vi App Adoption/Engagement, Churn Reduction, Upsell/ Cross-Sell, Data Monetization, Text/Social Media/ Sentiment Analytics and accelerates migration of 2G/3G subscribers to 4G as part of our both ARPU & market share growth strategy. Our AI/ML based 5G prioritization and ranking is able to predict and optimize customer offering with Hyper-Personalization at scale provides us pre-emptive decision making support. It leverages data-driven decision-making processes using massive amounts of data to overcome industryrestraining challenges and improve business decisions, ultimately enhancing customer experience in the digital era.
GTM time for AI/ML Models execution reduced from monthly to weekly frequency and now has capability to perform near Real-Time Predictive & Prescriptive Analytics at scale while the target is to roll out real time analytics to enable better customer delight and data monetization opportunities. This also enhances our capability to apply Deep Learning Algorithms including compute resource intensive Generative AI Algorithms over large volume of data concurrently instead of just experimenting with conventional Ensemble Machine Learning Algorithms thereby enabling better and scalable campaign performance. The Generative AI algorithms capabilities is being reinforced at Vi to optimize our NLP, Computer Vision and Video Analytics based use cases.
The deployed Big Data Analytics Platform over AWS Cloud has the most cost-effective architecture generating over 60% cost reduction that leverages both Data Lake & AWS Cloud storage & compute
components optimally to keep the cost as low as possible. CAPEX reduced almost to Zero with OPEX flexible and elastic to incorporate additional business impacting AI/ML Models that have high Business impact/value. We have been able to reduce AI model building and scoring time by more than 80% with Big Data AI/ML Cloud Analytics platform at scale and speed thereby supporting faster decisions and Go-to-Market strategy.
Partnerships & Alliances
In partnership with top security providers including FirstWave, Fortinet, Cisco, TrendMicro, IBM, and Netscout Arbor, VI Business has introduced VI Secure, a comprehensive cyber security portfolio. This initiative equips enterprise clients with a suite of dependable, cutting-edge security solutions that cater to their present and future cyber security requirements.
Integrated loT Solutions
Committed to enhancing digital experiences and strengthen its market leadership in IoT and other emerging technology businesses, Vi Business's year-round focus has been to empower businesses to be `Ready For Next'. Our innovative IoT solutions have transformed the way businesses operate, reinventing processes, operations, and customer experiences.
Our integrated IoT solutions cover a wide spectrum of industries, including Smart Infrastructure, Smart Mobility, and Smart Utilities. From connected vehicles to advanced energy management, VI Business is at the forefront of driving digital transformation across various sectors.
We have pioneered many industry's first initiatives that have made us the most trusted IoT partner for enterprises across India. We are the only Indian telecom company to offer a secured end-to-end IoT solution, encompassing hardware, network, analytics, security, and managed services. We are the first telco to launch GSMA certificated eSIM commercially and with advanced features like remote provisioning, Vi IoT eSIM ensures seamless connectivity for IoT devices. Our commitment to innovation in IoT remains unwavering with initiatives like Sanchaar Shakti -an end-to-end
multimodal loT logistics solution that help business achieve a substantial reduction in logistic cost.
With over 175+ test scenarios and global testing expertise, our IoT Lab-as-a-service in collaboration with C-DOT, offers device testing & certification, ensuring the reliability and scalability of your IoT solutions. Our constant innovation is envisioned with the launch of our self-care platform, IoT Smart Central that enables enterprises to centrally manage, control and monitor connectivity options for their IoT devices across industries and use cases.
SME Focus
The `Ready for Next' initiative from Vi Business supports MSMEs throughout their digital journey. Through the `Ready for Next' digital self-assessment process, over 80,000 MSMEs have evaluated their digital maturity in three key areas: Digital Customer, Digital Workspace, and Digital Business. This empowers them to select appropriate digital solutions.
Vi Business Plus offers Mobility Bundling solutions, catering to today's mobile workforce. These plans facilitate connection, communication, collaboration, and more, with features such as data pooling. Vi Business Plus ensures a superior customer experience with seamless, uninterrupted high-speed data. Moreover, it provides device security and Google Workspace solutions tailored for SMEs and startups, enhancing their productivity and efficiency.
Awards and Recognitions
Some key awards and recognitions received by your Company
during the period are:
Vi Business won multiple recognitions at the Voice & Data Excellence Awards 2022 under Enterprise Business Services and Customer Experience categories
Vi Business won multiple recognition at the CIO Choice Awards 2023 under various categories
- Telecom Services Vendor - Telecom Carrier (Mobile Access)
- Telecom Services Vendor - Telecom Carrier (International Access)
- Enterprise Mobility Vendor - Managed Mobility
- Telecom Services Vendor - Cloud Telephony
- Telecom Services Vendor - SIP Trunk
Vi won CX Awards 2023 for `Best Customer Experience Team of the Year'
Vi won multiple recognition at the ET Brand Equity -India DigiPlus Awards 2023
- Best Use of Performance Marketing - Silver
- Digital Campaign in the B2B Category - Bronze
Vi won multiple recognitions at Afaqs! Marketers' Xcellence Awards `23
- Best use of Short Form Video (Vi Max Postpaid) - Bronze
- Best Performance Marketing: Digital Customer Acquisitions (Vi Postpaid) - Bronze
- Best Use of Instagram (Vi Mood Jukebox) - Silver
- Best Use of Influencer on You Tube (#SpeedSeBadho with Raftaar) - Bronze
- Best Influencer Marketing (#SpeedSeBadho with Raftaar)
Vi won multiple recognitions at Afaqs! Brand Storyz Awards 2023
- Best use of Data for "Doubling digital acquisitions for Postpaid via customized messaging & precise targeting"- Gold
- Best Use of Social Media for "Vi Sach mucch too much campaign" - Gold
Vi was awarded with `Technology SIP Trunk' for Managed SIP Trunk by Frost & Sullivan - under Technology Innovation Leadership awards category
`Enabling Technology Leadership Award' for Vi Smart Mobility Solutions by Frost & Sullivan - under Enabling Technology Leadership awards category
Vi won awards across 7 categories at CIO Choice Awards 2024
- Cloud Telephony - 4th time winner
- Internet of Things - 6th time winner
- SDWAN Services - 1st nomination and win
- Telecom Carrier International Access - 3rd time winner
- Telecom Carrier Mobile Access - 10th consecutive win
- Rich Business Messaging - 1st nomination and win
- Digital Transformation Enabler - Ready for Next Assessment for MSMEs
Vi was recognized among the Top 100 companies for women in India by Avtar The Power of Diversity
Vi was awarded the best social media brand in the telecom domain and was also awarded for the best use of memes by Mad Over Marketing
Vi was awarded for best digital innovation at the e4m Indian Digital Marketing Awards 2023- Silver
Vi Dabbawala campaign was awarded Innovative Use of Influencer at Spikes - Gold
SUBSIDIARIES AND JOINT VENTURES
As on March 31, 2024, your Company has nine subsidiary companies, one joint venture company and one associate company, details are given below:
Subsidiaries
1. Vodafone Idea Telecom Infrastructure Limited (VITIL)
VITIL is engaged in renting out passive infrastructure to telecommunication service providers for hosting their active equipment on existing fibre portfolio of ~170,534 kms. During the year under review, the total income stood at ' 9,552 Mn as comparted to ' 8,455 Mn in previous year.
2. Vodafone Idea Business Services Limited (VIBSL)
VIBSL is an outsourcing hub for backend IT support, data centre operations and hosting services to the Company and its subsidiaries. It also has an OSP license business. During the year under review, the total income stood at ' 1,901 Mn as compared to ' 1,364 Mn in the previous year.
3. You Broadband India Limited (YBIL)
YBIL is engaged in providing high speed broadband internet access through cable network, high
bandwidth internet broadband services to retail, enterprise segment, infrastructure support to licensed telecommunication service providers. During the year under review, the total income stood at ' 1,191 Mn as compared to ' 1,372 Mn in the previous year.
4. Vodafone Idea Manpower Services Limited (VIMSL)
VIMSL is engaged in the business of providing manpower services to the Company. During the year under review, the total income stood at ' 764 Mn as compared to ' 743 Mn in the previous year.
5. Vodafone Idea Communication Systems Limited (VICSL)
VICSL is engaged in the business of trading of Mobile handsets, data card and related accessories and services. During the year under review, the total income stood at ' 387 Mn as compared to ' 453 Mn in the previous year.
6. Vodafone Idea Shared Services Limited (VISSL)
VISSL is an outsourcing hub for Finance & Accounts, Human Resources, Supply Chain Management, Credit & Collection Support, Customer Support and catering to the Information Technology (IT) needs for data consolidation, back end IT support for the Company and its subsidiaries. During the year under review, the total income stood at ' 944 Mn as compared to ' 1,195 Mn in the previous year.
7. Vodafone Idea Technology Solutions Limited (VITSL)
VITSL is engaged in providing Technology, Software, Hardware, Value Added Services (VAS), Application Software, Contents and related products and services that facilitate and develop access to IT enabled VAS products and services whether on single or multiple platform(s) or operating system(s). VITSL is also engaged in the business of providing Data Centre related services and IT Solutions (including E-SIMs) to its customers. During the year under review, the total income stood at ' 399 Mn as compared to ' 191 Mn in the previous year.
8. Vodafone Foundation (VF)
VF is a Section 8 Company as per Companies Act 2013. Pursuant to the enactment of Companies Act, 2013 and Section 135 of the Companies Act, 2013, VF is an implementing agency and carries out Corporate Social Responsibility (`CSR') activities for the Company, its subsidiaries, associate and joint venture, promoter group companies in line with the Schedule VII of the Companies Act, 2013. VF primarily focuses on CSR activities that includes promoting and development of (a) education, (b) financial literacy, (c) empowerment of women, (d) healthcare, (e) environment, (f) eradication of poverty, (g) improving socio-economic condition of farmers.
9. Vodafone M-pesa Limited (VMPL)
VMPL was in the business of Prepaid Payment Instruments (PPI) and Business Correspondence and provided customers with a mobile wallet and money transfer services in the form of M-pesa. VMPL has ceased all operations and surrendered its Prepaid Payments Instruments Licence issued by the Reserve Bank of India (RBI) under the Payment and Settlement System Act, 2007 with effect from 30th September, 2019 as per the guidance and approval of RBI - Department of Payment and Settlement System (DPSS) and also terminated its Business Correspondence Agreement with ICICI Bank with effect from 31st July 2019.
Post completion of the three year period on 30th September, 2022, as was directed by the RBI while approving the surrender of the PPI Licence, VMPL had written to the RBI on way forward relating to compliances to be continued, post which the RBI has advised to continue maintaining the unextinguished liability towards PPI holders and merchant in the escrow account till further communication from their end. As Per the latest communication from RBI dated 2nd August, 2023, the Company has been advised to follow the same practice.
Joint Venture Company
Firefly Networks Limited, is a joint venture with Bharti
Airtel Limited, with each partner having equal (50% each)
shareholding. The main objective of Firefly is to conduct the
business of site acquisition, installation, commissioning, operations and maintenance of Infrastructures at the Hotspots to enable telecommunication and internet service providers, to offer customers Wi-Fi access across the territory. Revenue from operations for the Financial Year ended March 31, 2024 was ' 97 Mn as compared to previous year's ' 196 Mn.
Associate Company
Aditya Birla Idea Payments Bank Limited (ABIPBL),
an associate of the Company had decided to wind up business voluntarily on July 19, 2019, due to unanticipated developments in the business landscape of payments bank that have made the economic model unviable. ABIPBL had filed for voluntary winding up before the Bombay High Court and the Hon'ble High Court vide its order dated September 18, 2019, approved voluntary winding up of ABIPBL. ABIPBL is in process of winding-up.
In accordance with the provisions contained in Section 136(1) of the Companies Act, 2013 (Act), the Annual Report of the Company, containing therein its standalone and the consolidated financial statements are available on the Company's website https://www.myvi.in/investors/ annual-reports.
Further, pursuant to the said requirement, the financial statements of each of the aforesaid subsidiary companies are available on the Company's website https://www. myvi.in/investors/annual-reports and shall be available for inspection during business hours at the Registered Office of the Company. Any member who is interested in obtaining a copy of the financial statements may write to the Company Secretary at the Registered Office of the Company.
In terms of provisions contained in Section 129(3) of the Act, read with Rule 5 of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and joint venture companies in Form AOC-1 is provided as `Annexure A' to this report.
EMPLOYEE STOCK OPTION SCHEMES
Your Company values its employees and is committed to adopt the best HR practices for rewarding them suitably. In this direction your Company had implemented the Employee Stock Option Scheme, 2006 (ESOS-2006) and Employee Stock Option Scheme, 2013 (ESOS-2013) with
an objective of enabling the Company to attract and retain talented human resources by offering them the opportunity to acquire a continuing equity interest in the Company and made grants to eligible employees under ESOS-2006 and ESOS-2013 from time to time.
The Board of your Company has also approved broad parameters for implementing a new Employee Stock Option Scheme - 2018 (ESOS-2018), which has also been approved by the members at the Annual General Meeting held on December 22, 2018. The said Scheme is in the process of being implemented. Further, details of plans also form part of Notes to Financial Statements.
In terms of the provisions of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2014, the details of the Stock Options and Restricted Stock Units granted under the above mentioned Schemes are available on your Company's website https://www.myvi.in/investors/annual-reports.
A certificate from M/s. Umesh Ved & Associates, Company Secretaries, Secretarial Auditors, certifying that the Company's Stock Option Plans are being implemented in accordance with the ESOP Regulations would be placed at the Annual General Meeting for inspection by Members.
INTERNAL FINANCIAL CONTROL SYSTEMS AND ITS ADEQUACY
Your Company has in place adequate internal control systems commensurate with the size of its operations. The Company has in place adequate controls, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal auditors and the reviews performed by management and the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the Financial Year 2023-24.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements forms part of this Annual Report and shall also be laid before the shareholders in the ensuing Annual General Meeting of the Company. The Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.
RISK MANAGEMENT
In compliance with the requirements of regulations contained in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the provisions of the Companies Act, 2013, your Company has constituted a sub-committee of Directors known as Risk Management Committee, details whereof are set out in the Corporate Governance Report forming part of the Annual Report to oversee Enterprise Risk Management Framework. The role of the Risk Management Committee is inter-alia to approve the strategic risk management framework of the Company, and review the risk mitigation strategies and results of risk identification, prioritization & mitigation plans.
Your Company has a well-established Enterprise-wide Risk Management (ERM) framework in place for identification, evaluation and management of risks, including the risks which may threaten the existence of the Company. In line with your Company's commitment to deliver sustainable value, this framework aims to provide an integrated and organized approach for evaluating and managing risks.
A detailed exercise is carried out to identify, evaluate, manage and monitor the risks. As required the Committee/ Board meets to review the risks and steps to be taken to control and mitigate the same.
HUMAN RESOURCE MANAGEMENT
Your Company's people architecture has been built on the principles of being a consumer centric company with technology as the bedrock. The organization has equipped itself for high change agility, has embedded trust at the foundation of its people agenda, and has adopted digital as the first port of call for all solution building.
Health & Safety
At VIL, Health, Safety and Wellbeing (HSW) are not just priority, these are our core values. We are committed to "not doing business by putting people at risk". Our continued efforts and focus on our Absolute Safety rules and standards backed by a strong governance mechanism has helped us end the year with Zero work related fatality.
Diversity and Inclusion
At VIL, we realize that Diversity and Inclusion at the workplace helps foster an open and healthy work environment and is critical to our business strategy. Our constant connect with our women colleagues through small group discussions and pulse surveys, sensitization workshops with managers and leaders allow us to build a larger appreciation of the challenges our women colleagues shoulder and build various enabling platforms and policies to help them be effective at work.
VIL has been recognized second time in a row for being amongst Top 100 companies for Women in India 2023 by a study conducted by Avtar and Seramount BCWI Study 2023. During the Financial Year ended 2023-24, female representation in the VIL workforce increased by 1.64%. At least 50% hiring of women has been ensured in various campus hiring programs. Development programs have been rolled out for senior, middle and junior level women employees for career acceleration. Policies have been made more inclusive by introducing primary care givers and same sex partners as beneficiaries. Pulse checks and focused group discussions with all women colleagues and maternity return employees have been conducted to assess experience and impact of programs. Child care assistance, elder care assistance and mental well-being assistance continues for all employees. Infrastructure support has been improved with dedicated parking facilities to expectant mothers and differently abled people in all major office locations. A large intervention has been initiated to provide geo tagged hygienic restroom facilities in sales beats where women are deployed.
CORPORATE GOVERNANCE
Your Company is committed to maintain the highest standards of Corporate Governance. Your Company continues to be compliant with the requirements of
Corporate Governance as enshrined in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (`Listing Regulations'). A Report on Corporate Governance as stipulated under the Listing Regulations forms part of the Annual Report. A certificate from the Statutory Auditors of the Company, confirming compliance with the conditions of Corporate Governance, as stipulated in the Listing Regulations forms part of the Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility & Sustainability Report (`BRSR') forms part of this Annual Report. The BRSR report describes initiatives undertaken by the Company from an environmental, social and governance perspective. Further, SEBI vide its circular no. SEBI/HO/ CFD/CFD SEC 2/P/ CIR/2023/122 dated 12 July 2023, updated the format of BRSR to incorporate BRSR core, a subset of BRSR, indicating specific Key Performance Indicators (KPIs) under nine ESG attributes, which are subject to mandatory reasonable assurance by an independent assurance provider. In accordance with this requirement, the Company has appointed Emergent Ventures India Pvt. Ltd as the assurance provider for BRSR core. The assurance statement on BRSR Core issued by Emergent Ventures India Pvt. Ltd., forms part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
In terms of the provisions of section 135 of the Companies Act, read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility ("CSR") Committee. The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report which forms part of this report.
The Company has policy on Corporate Social Responsibility (`CSR') recommended by the CSR Committee and approved by the Board and the same can be accessed on the Company's website at https://www.myvi.in/investors/ corporate-governance.
In view of the losses incurred by the Company during the last three financial years, the Company has no obligation for CSR spend during the Financial Year 2023-24.
Further, for ensuring compliance of provisions of section 135 of the Companies Act, 2013 and the applicable Rules framed thereunder, the brief outline of the CSR Policy for the Company and a "NIL" Annual Report on CSR Activities is annexed as "Annexure B" which forms part of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.
DIRECTORS' RESPONSIBILITY STATEMENT
The Audited Financial Statements for the year under review are in conformity with the requirements of the Companies Act, 2013 and the applicable Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review and reasonably present your Company's financial condition and results of operations. Your Directors, to the best of their knowledge and belief, confirm that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;
b) the accounting policies selected have been applied consistently and judgements and estimates are made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of your Company as at the end of the financial year and of the financial performance and cash flows of the Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts were prepared on a going concern basis;
e) your Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively; and
f) your Company has devised a proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, Mr. K.K. Maheshwari (representing Aditya Birla Group) resigned from the Board of the Company with effect from close of business hours on April 19, 2023. Further, Mr. Diego Massidda (representing Vodafone Group) resigned from the Board of the Company with effect from May 25, 2023. The Board places on record its sincere appreciation for the valuable guidance and contribution made by Mr. K. K. Maheshwari and Mr. Diego Massidda in the deliberations of the Board during their tenure as Director(s).
The Board based on the recommendation of the Nomination & Remuneration Committee appointed Mr. Kumar Mangalam Birla as an Additional Director (Non-Executive and NonIndependent), representing Aditya Birla Group effective April 20, 2023. The Nomination and Remuneration Committee also appointed Mr. Sateesh Kamath as an Additional Director (Non-Executive and Non-Independent), representing Vodafone Group effective May 25, 2023. The appointment of Mr. Kumar Mangalam Birla and Mr. Sateesh Kamath have been confirmed at the last Annual General Meeting of the Company held on July 17, 2023.
In accordance with the provisions of the Companies Act, 2013, Mr. Ravinder Takkar and Mr. Sunil Sood are liable to retire from office by rotation, and being eligible, have offered themselves for re-appointment at the ensuing Annual General Meeting of the Company.
Mr. Ashwani Windlass, Ms. Neena Gupta and Mr. Suresh Vaswani, Independent Directors were appointed for second term of three years and their term is due to end on August 30, 2024, September 16, 2024 and February 7, 2025, respectively. The Board based on the recommendation of the Nomination & Remuneration Committee and subject to the approval of shareholder's approved the increase in second term of Mr. Ashwani Windlass, Ms. Neena Gupta and Mr. Suresh Vaswani from three years to five years and accordingly, now their term as an Independent Director will cease on August 30, 2026, September 16, 2026 and February 7, 2027 respectively.
Further, post the end of the financial year, upon the recommendation of the Nomination & Remuneration Committee, the Board has considered and approved the appointment of Mr. Rajat Kumar Jain as an Independent
Director of the Company for a term of five years w.e.f. August 31, 2024, in place of Mr. Arun Adhikari whose term will end on August 30, 2024. The appointment of Mr. Rajat Kumar Jain is subject to shareholder approval at the ensuing Annual General Meeting.
All Independent Directors have submitted their declaration of independence, pursuant to the provisions of Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations, stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience, expertise and hold highest standards of integrity.
All Independent Directors of your Company have registered their name in the data bank maintained with the Indian Institute of Corporate Affairs, in terms of the provisions of the Companies (Appointment and Qualification of Directors) Rules, 2014.
A brief profile of the Directors proposed to be appointed/ re-appointed / whose term is proposed to be increased are annexed to the Notice convening Annual General Meeting forming part of this Annual Report.
Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are Mr. Akshaya Moondra, Chief Executive Officer, Mr. Murthy GVAS, Chief Financial Officer and Mr. Pankaj Kapdeo, Company Secretary. There has been no change in the positions of the Key managerial personnel of the Company during the year under review.
BOARD EVALUATION AND FAMILIARIZATION PROGRAMME
Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, a formal evaluation mechanism is in place for evaluating the performance of the Board, the Committees thereof, individual Directors and the Chairman of the Board. The evaluation of Directors was done based on the criteria which includes, amongst others, providing strategic perspective, attendance and preparedness for the meetings, contribution at meetings, effective decision making ability and independent judgement etc.
The Board has carried out an annual evaluation of its own performance, its Committees, Independent Directors, Non-
executive Directors and the Chairman of the Board. The Directors expressed their satisfaction with the evaluation process and the performance of the Board as a whole. It was also noted that the Committees are functioning well and besides the Committee's terms of reference as mandated by law, important issues are brought up and discussed in the Committees. The Board was also satisfied with the contribution of the Directors, in their respective capacities, which reflected the overall engagement of the Individual Directors.
The details of programme for familiarization of Independent Directors of your Company is available on your Company's website https://www.myvi.in/investors/corporate-goverance.
REMUNERATION POLICY
The Company has a Remuneration Policy in place encompassing the appointment and remuneration philosophy of the Company. The Policy comprises of the various elements and terms of appointment. The Policy consists of various aspects in connection to Remuneration Program applicable for Directors, Key Managerial Personnel and Senior Management of the Company, Performance Goal Setting, Benefit & Perquisites, Compliance and other such elements.
The policy was formulated by the Nomination and Remuneration Committee in terms of Section 178(3) of the Companies Act, 2013 and it also includes the criteria for determining qualifications, positive attributes, independence of a Director and other matters. A copy of the said policy is available on the website of the Company https://www.myvi. in/investors/corporate-governance.
DIVIDEND DISTRIBUTION POLICY
The Board has in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, formulated Dividend Distribution Policy. This policy will provide clarity to the stakeholders on the dividend distribution framework of the Company. The Policy sets out various internal and external factors which shall be considered by the Board in determining the dividend payout. The Dividend Distribution Policy is attached as Annexure G' to this report and is also available on the website of the Company https://www.myvi. in/investors/corporate-governance.
BOARD MEETINGS
During the year, eleven meetings of the Board of Directors were held. The details of the meetings and the attendance of the Directors are provided in the Corporate Governance Report. Further, maximum interval between two meetings of the Board of the Directors has not exceeded 120 days.
BOARD COMMITTEES
Your Company has in place the Committee(s) as mandated under the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There are currently seven committees of the Board, namely:
1. Audit Committee
2. Nomination & Remuneration Committee
3. Stakeholders' Relationship Committee
4. Risk Management Committee
5. Corporate Social Responsibility Committee
6. Capital Raising Committee
7. Finance Committee
Details of the Committees along with their charter, composition and meetings held during the year, are provided in the Corporate Governance Report, which forms part of this report.
CONTRACT AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during the Financial Year with the related parties are detailed in the Note 58 of the Standalone Financial Statements. They were in ordinary course of business and on arm's length basis.
The related party transaction which are considered material during the year is the existing arrangement with Indus Towers Limited (Indus), which provides Passive Infrastructure Services and related operations and maintenance services to various telecom operators in India, including your Company. Indus is continuing as a related party, as the same is a Joint Venture of the Promoter Group.
Indus is currently one of the world's largest independent passive infrastructure providers. Your Company had entered
into a Master Service Agreement (MSA) with Indus in 2008 (which has been amended from time to time) for availing passive infrastructure services provided by them in certain service areas. The MSA requires individual tenancy service contracts to be executed for each passive infrastructure site, the terms of which vary depending on the location, type of site, number of existing tenants, etc. and contain lock in period for ensuring continuity. Such terms are similarly applicable to all other telecom providers having arrangement with Indus. The details of the material related party transaction with Indus for the Financial Year ended March 31, 2024 is provided in Form AOC-2, which is attached as Annexure C' to this report.
None of the related party transactions entered into by the Company were in conflict with the Company's interest. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large. Member's approval for Material Related Party Transaction, as defined under the Listing Regulations shall be obtained at the ensuing Annual General Meeting.
All Related Party Transactions are placed before the Audit Committee/Board, as applicable, for their approval. Omnibus approvals are taken for the transactions which are repetitive in nature. The Company has implemented a Related Party Transaction Manual and Standard Operating Procedures for the purpose of identification and monitoring of such transactions. The details of the transactions with Related Parties are provided in the accompanying financial statements as required under Ind AS 24.
The policy on Related Party Transactions is uploaded on the Company's website https://www.myvi.in/investors/ corporate-governance.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
As your Company is engaged in the business of providing infrastructural facilities, the provisions of Section 186 of the Companies Act, 2013 relating to loans made, guarantees given or securities provided are not applicable to the Company. The details of such loans made and guarantees given are provided in the standalone financial statements.
Also, particulars of investments made by the Company are provided in the notes to standalone financial statements.
VIGIL MECHANISM - SPEAK UP POLICY
Your Company has in place a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of your Company's Code of Conduct. Adequate safeguards are provided against victimization to those who avail of the mechanism and direct access to the Chairman of the Audit Committee in exceptional cases.
The Vigil Mechanism - Speak Up policy is available on your Company's website https://www.myvi.in/investors/ corporate-governance.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed pursuant to Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, are given to the extent applicable in Annexure D' forming part of this report.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as 'Annexure E' to this report.
In accordance with the provisions of Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid Rules, forms part of this Report. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the shs@vodafoneidea.com.
AUDITORS AND AUDIT REPORTS Statutory Auditors
The members of the Company pursuant to the recommendation of the Audit Committee and the Board of Directors; had at the 27th Annual General Meeting held on August 29, 2022, appointed M/s. S.R. Batliboi & Associates LLP, Chartered Accountants, Firm Registration No. 101049W/E300004, as the Statutory Auditors of the Company for another period of five years till the conclusion of 32nd Annual General Meeting of the Company to be held in the Calendar Year 2027. Consequently, the existing Statutory Auditors have been re-appointed for another term pursuant to Section 139(2) of the Act.
Auditors' Report and Notes to Financial Statements
The Board has duly reviewed the Statutory Auditors' Report on the Financial Statements at March 31, 2024. The report does not contain any qualification, disclaimer or adverse remarks.
As regards the comments under para i(a)(A) of Annexure 1 to the Independent Auditors' Report regarding certain assets where Company is in the process of updating situation and quantitative information in the records maintained by the Company it is to be noted that the Company had undertaken a large scale network integration activity in earlier years and post completion of this activity, the Company has completed updating its records as regards situation and quantitative details of location for majority of assets and for the balance, the Company is in the process of updating the same.
Also, as regards the comments under para ix(d) of Annexure 1 to the Independent Auditors' Report regarding utilisation of funds raised on short term basis (in form of trade payable and other liabilities) for long term purposes (representing acquisition of property, plant and equipment and to fund the losses of the Company), it is to be noted that the funds have been utilised in line with the purpose for which it was raised.
Cost Audit and Cost Auditors
The Company is required to make and maintain cost records pursuant to Section 148 of the Companies Act, 2013.
In terms of the provisions of Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company on the recommendation of the Audit
Committee appointed M/s. Sanjay Gupta & Associates, Cost Accountants, as the Cost Auditors, to conduct the Cost Audit of your Company for the Financial Year ended March 31, 2024. The Cost Auditors will submit their report for Financial Year 2023-24 within the timeframe prescribed under the Companies Act, 2013 and rules made thereunder. The Cost Audit report for the Financial Year 2022-23 did not contain any qualification, reservation, disclaimer or adverse remark.
The Board, on the recommendation of Audit Committee, has re-appointed M/s. Sanjay Gupta & Associates, Cost Accountants, as Cost Auditors of the Company for Financial Year 2024-25 at a remuneration of ' 1.2 Mn plus applicable taxes and reimbursement of travel and out of pocket expenses . The Company has received consent from M/s. Sanjay Gupta., Cost Accountants, to act as the Cost Auditor of your Company for Financial Year 2024-25, along with the certificate confirming their eligibility.
In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditors has to be ratified by the shareholders, the Board recommends the same for approval by shareholders at the ensuing Annual General Meeting.
Secretarial Auditor
In terms of the provision of the Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. Umesh Ved & Associates, Company Secretaries, Ahmedabad, as the Secretarial Auditor for conducting the Secretarial Audit of your Company for the Financial Year ended March 31, 2024. The report of the Secretarial Auditor is annexed to this report as 'Annexure F'. The contents of the Secretarial Audit Report are self-explanatory and do not contain any qualification, reservation or adverse remark.
As per Regulation 24A of the Listing Regulations, material unlisted subsidiaries of a listed entity incorporated in India is required to annex a Secretarial Audit Report issued by a Company Secretary in practice. Due to networth of the Company being negative, Vodafone Idea Communication Systems Limited, Vodafone Idea Shared Services Limited and Vodafone Idea Manpower Services Limited, having positive networth were material subsidiaries of the Company. In compliance with the requirement, the Secretarial Audit
Report of material subsidiaries is attached as Annexure F-1 to F-3 to the Annual Report.
SECRETARIAL STANDARDS
The Company has generally complied with all the applicable provisions of Secretarial Standard on Meetings of Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2), respectively issued by Institute of Company Secretaries of India.
REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Statutory Auditors, Cost Auditors and the Secretarial Auditor have not reported to the Audit Committee, any instances of fraud committed against the Company by its officers and employees, the details of which would need to be mentioned in Board's Report under Section 143(12) of the Act.
ANNUAL RETURN
As provided under Section 92(3) and 134(3)(a) of the Act, read with Rule 12 of Chapter VII Rules of the Companies (Management and Administration) Amendment Rules, 2020, Annual Return in Form MGT-7 for Financial Year 2023-24 is uploaded on the website of the Company and can be accessed at https://www.myvi.in/investors/annual-reports.
OPPORTUNITIES, RISKS, CONCERNS AND THREATS
The Indian mobile industry has witnessed hyper-competition over the last decade leading to duplication of investments and significant reduction in prices. As a result the market has consolidated from 8-10 operators to three private operators and one government operator; a structure which offers long term opportunity to each of the player. Considering the critical role of telecom sector in the economic development, the Government also extended the support in form of 'The telecom reform package of 2021'. The compelling macro-economic backdrop, growth in smartphone usage and growing digital adoption and a large population will further add to the sector growth.
The Telecommunications Industry is a vital part of the global economy, connecting people and businesses through various devices and networks providing a platform for innovation and growth. In India, mobility is the key medium to offer connectivity as the growth of wired internet has
been restricted to major cities due to lack of adequate infrastructure. India is one of the largest and fastest-growing digital economies in the world, with more than 800 Mn internet subscribers and an array of digital services for consumers and businesses. Increasing data consumption, especially through video, social media usage, gaming as well as increasing online commerce is driving strong demand for high speed internet which is expected to further increase in future. Tech innovators are increasingly leveraging the reach and convenience of mobile networks and services to deliver a host of digital lifestyle and life-saving services, including e-commerce, digital entertainment, digital health and disaster response. Further, adoption of wireless internet by those in the oldest and youngest age group has grown markedly since about a decade ago. India's largest world population, rapid urbanization and growing middle class ensure a growing subscriber base. Company's well-defined strategy along with its competitive spectrum footprint across its key circles, significant network investments and customer affinity to its unified brand \Jl positions it well to benefit from these trends.
Your Company has several ongoing litigations and any adverse determination of these remains a risk. Your Company works with various local, state and central government agencies for specific permissions to operate its mobile licenses and is required to meet various regulatory/policy guidelines of the DoT and may be subjected to various regulatory demands, penalties/fines or increased cost of compliance. Your Company makes best effort to adhere to all such requirements. Your Company believes in sound corporate governance practices and believes that these litigations would be settled in due course in the best interest of all stakeholders.
The telecom sector is characterized by technological changes and competition from new technologies is an inherent threat. Your Company has a competitive spectrum portfolio and robust network footprint and continues to invest in the new emerging network solutions to adapt to any future technological changes. Your Company has been deploying an array of 5G concepts and technologies such as Massive MIMO, DSR, Open RAN, Cloudification of core and edge cloud/deployment. Your Company has completed minimum roll-out obligation for 5G network and gearing itself to offer 5G services soon.
Your Company's business is dependent on key Network and IT equipment suppliers for management and continuity of its Network, IT and business processes. These networks may also be vulnerable to technical failures or any natural calamity. Your Company has robust network & IT security processes and disaster recovery plans. Your Company is in partnership with global leaders in Network equipment and IT services and enjoys very long standing healthy relations with all its suppliers.
Your Company believes that with the recent equity infusion as described in the report and its ability to raise additional funds as required, it shall be able to successfully negotiate with lenders on continued support, generate cash flow from operations that it needs to settle its liabilities as they fall due and continue to have the necessary government support as per Telecom Reforms Package.
OUTLOOK
Your Company is cognizant of the need for continued investments and innovation in order to remain competitive in the face of evolving technological developments and changing customer preferences. Its ability to evolve and adapt has been instrumental in its survival thus far despite various challenges and it remains committed to exploring new opportunities and staying ahead of the curve. Your Company will continue its journey of becoming a truly integrated digital service provider through its several strategic initiatives as well as continue to make investments for expanding 4G coverage and capacity especially in its 17 priority circles and introduce 5G services. After the recent tariff hike, your Company will continue to focus on improving ARPU by driving the penetration of Unlimited Data (ULD) pricing plans as well as digitalization of customer servicing and distribution channels with an aim to provide the best of customer experience to retail and enterprise customers.
Your Company will strive to grow using innovative technologies and convergence offerings that redefine businesses and from rising adoption of smart devices, digital lifestyle as well as expansion of digital connectivity. In Business Services, your Company will increasingly focus on new and fast growing segments such as Cloud services and IoT. To further drive the digital agenda, your Company will look for deeper integration opportunities with its partners using its platform capabilities to provide a differentiated telco++ experience and value for partners as well as customers.
Your Company will remain focused on providing superior data and voice experience and building a differentiated digital experience with focus on increasing 4G subscribers. With this objective, your Company recently acquired additional 900 MHz spectrum releasing a dedicated 5 Mhz carrier for 4G, which will improve coverage, particularly indoor coverage and improve VoLTE experience.
During the calendar year 2024, your Company raised equity of ~ '240 billion - ' 180 billion through FPO, ~ ' 20.8 billion through preferential allotment to promoters and ~ ' 24.6 billion through preferential allotment to Nokia and Ericsson, including conversion of OCDs amounting to ' 16 billion into equity shares. Your Company remains engaged with lenders for debt fund raising. Your Company is well positioned to effectively compete in the market with all these initiatives coupled with the support provided by the Government Reforms Package, a strong subscriber base of 212.6 million (March 31, 2024), 4G population coverage of over 1 billion Indians, competitive spectrum profile, extensive distribution reach and a well-established brand along with differentiated digital offerings.
SUSTAINABILITY JOURNEY
Telecom sector provides connectivity to individuals & communities that fosters empowerment and inclusion. The near ubiquitous reach of the mobile makes it the most relevant channel for last mile outreach. The mobile phone has become the fastest window to a world of information, better education, livelihood, employment, health, inputs on agricultural practices and governance.
Being a telecom company, VIL has been adopting various solutions/approaches to ensure that its networks are run in an energy efficient manner.
Our primary focus has been on reducing energy cost and minimizing environmental impact of the Company's operations. We prioritize adaptability, agility and foresight to ensure that our business models, operations, acquisitions and projects are not locked into unsustainable paths. Our sustainability journey gets complimented with our corporate responsibility agenda which is directed towards addressing some of India's critical social and developmental challenges in both rural and urban communities using the inherent potential and reach of the mobile technology and platform and reducing the environmental impact with increasing preference and usage of digital.
We are fully committed towards creating value for all stakeholders from customers to partners, to employees, to communities and to the larger planet. We achieve this through our passion for customer satisfaction, supporting our partners as they build capacity, engaging with and valuing our employees in an inclusive agenda to instill pride in the work we do and develop sustainable business practices. This is being done with our responsible support towards digital inclusion as a national goal and in continuing with our practices of community development in areas like education & skilling, women empowerment and agriculture.
We also firmly believe that sustainable development cannot be achieved with mere focus within own boundary of business practices. The Company has forged meaningful and impactful partnerships with its vendors and partners to address the needs and challenges related to sustainability. We will continue to be future-ready by staying ahead of the curve and being charged up to thrive in a sustainable tomorrow by building sustainable businesses and propositions. The Company has a robust Sustainability Framework of Policies, Technical Standards etc. which help in Sustainability journey of the Company.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Committee have been set up in business units to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the Financial Year 2023 - 2024, 6 complaints pertaining to sexual harassment were received and as on March 31, 2024 and all 6 have been resolved.
OTHER DISCLOSURES
- There are no material changes and commitments affecting the financial position of your Company between end of financial year and the date of report, other than those disclosed in the significant developments section of the Board's Report.
- Your Company has not issued any shares with differential voting rights.
- There was no revision in the financial statements.
- Your Company has not issued any sweat equity shares.
- There was no application made or proceedings pending against the Company under the Insolvency and Bankruptcy Code, 2016 and there is no instance of one-time settlement with any Bank or Financial Institution.
- There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations, other than the order passed by the Hon'ble Supreme Court on the AGR matter in October, 2019, which has been disclosed in the significant developments section of the Board's report.
CAUTIONARY STATEMENT
Statements in the Directors' Report and the Management Discussion and Analysis describing your Company's objectives, projections, estimates, expectations, or predictions may include certain `forward-looking statements' within the meaning of applicable securities laws and regulations. Such forward looking statements are made on the basis of certain assumptions which we believe are reasonable in all material respects. Actual results could differ materially from those expressed or implied assumptions. Some of the important factors that could make a difference to your Company's operations or financials include factors like availability and
prices of telecom equipment, concentration of supply side, technological shift impacting consumer behavior, changes in government regulations or policies, tax regimes etc. Your Company is not obliged to publicly amend, modify, or revise any forward-looking statements on the basis of any subsequent development, information, or events, or otherwise.
ACKNOWLEDGEMENT
Your Directors place on record their sincere appreciation to the Department of Telecommunications, Telecom Regulatory Authority of India, the Central Government, the State Governments, all its investors & stakeholders, equipment suppliers, technology providers and other vendors, bankers, value added service partners, all the business associates and above all, our subscribers for the co-operation and support extended to the Company. Your Directors also wish to place on record their deep appreciation to the employees for their hard work, dedication and commitment.
For and on behalf of the Board
Ravinder Takkar Himanshu Kapania
Non-Executive Chairman Non-Executive Director
(DIN : 01719511) (DIN : 03387441)
Place : Mumbai Date : July 29, 2024
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