It has been widely reported in the Indian press recently that Vodafone Group has raised concerns over the ability of Vodafone Idea, its joint venture in India with the conglomerate Aditya Birla Group, to make payments, presumably relating to its vast debt.
Vodafone Group, in a recent results report, also expressed uncertainty over Vodafone Idea’s ability to clear its payment dues to Indus Towers, although Vodafone Idea is said to be keeping up with most or all of its monthly payments to Indus.
Among a number of observations relating to Vodafone Idea's financial situation, the report also suggested that Vodafone Idea remains in need of additional liquidity support from its lenders and intends to raise additional funding. The report also noted “significant uncertainties” in relation to Vodafone Idea’s ability to make payments in relation to any remaining liabilities.
However, Vodafone Group also said that its carrying value of the investment in Vodafone Idea is nil and that the “group is recording no further share of losses in respect of VIL”.
Vodafone Group owns a nearly 32% stake in Vodafone Idea. The Aditya Birla group owns an 18% stake.
Meanwhile Vodafone Idea is still losing customers. According to a recent report in the Economic Times, Vodafone Idea lost two million subscribers in February; both of its nearest competitors added subscribers.
What all of this means to Vodafone Idea's future is unclear, although, closer to home, Vodafone Group has already announced swingeing cuts to its own operations. It is to axe 11,000 jobs over three years – the biggest set of job cuts in the company’s history – after its new boss, Margherita Della Valle, criticised Vodafone’s lacklustre performance across many of its main markets in Europe.