vodafone idea ltd share price Management discussions

INDIAN WIRELESS SECTOR

India is the worlds second-largest telecommunications market with a subscriber base of 1.1 Bn as on March23. It has registered strong growth in the last decade with addition of 376 Mn subscribers. The mobile operators played a critical role in providing seamless connectivity to millions of Indians and contributed significantly towards the economic growth and employment generation.

The events that have marked the sector during the Financial Year 2022-23 are indeed the steps in the path towards transforming India into a digitally empowered society and knowledge economy. Firstly, the common enabler to achieve the objectives of Atmanirbhar Bharat and Make in India missions is ‘technology and the wireless sector is one of the key pillars to realise this vision of Digital India. Wireless sector is the firm backbone of innovations and new age technologies which are hallmark of Indias transformation into a digital nation. Secondly, the Indian government has undertaken several initiatives to maximize the opportunity and ensure the financial stability of the telecom industry, such as Telecom Reform Package, lowering the reserve price of spectrum in 5G auctions, amending the Right of Way Policy and working towards redefining the regulatory framework via Draft Telecom Bill. Lastly, the DoT has offered additional spectrum through auction, reduced the SUC charges to NIL on the spectrum acquired through auction from 2022 spectrum auction and allowed spectrum payments to be spread over the spectrum validity period of 20 years, all of which enabled the telecom operators to make large commitments in the spectrum auctions as well as towards rolling out the next generation wireless networks.

During Calendar Year 2022, industry revenue grew by 20.1% almost reaching the peak of Rs. 2 trillion driven by tariff increases across all prepaid and post-paid plans and subscriber shift from 2G to 4G. These have helped drive ARPU and Revenue. Tariffs continue to remain unsustainable and need to increase significantly from current levels to improve overall industry health and generate reasonable returns for operators to promote investments, including investments towards new and emerging technologies. Further, the current ARPU levels are lower in comparison to historic trends, despite the fact that the consumer gets much more value in terms of unlimited voice and daily data allowances. All these facts indicate the market will be able to absorb further tariff hikes at regular intervals.

While the operational challenges continue, the consolidation of the industry from 8-10 operators earlier to three large private operators and one government operator, over a period of last few years, positions the surviving operators well to benefit from the growth opportunities on the back of increasing digital penetration in a digital-centric, post-pandemic world. 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. Indias largest world population, rapid urbanization and growing middle class ensure a growing subscriber base. The overall wireless tele-density for India as of March 2023 stood at 82.46% suggesting there is still a proportion of population, yet to start using mobility services. This holds true especially for rural areas where tele-density is still low at 57.46%, which represents a significant opportunity for the Indian telecom operators. All the telecom operators with their massive network investments, are well placed to benefit from these trends.

The continued accessibility to mobile services and low priced tariffs has spurred the growth and deployment of wireless broadband internet. Mobile broadband is the primary medium to access internet in India as the lack of adequate wired internet infrastructure restricted its growth only to major cities. Smartphones have been the epicenter of Indias phenomenal data growth story as mobile data traffic increased by 3.2x while average data per user per month grew 2x in the last five years from 2018-2022 (Source: Nokia - India Mobile Broadband Index 2023). Smartphone has become the foremost platform to create, distribute and consume digital services in India. Smartphone adoption has increased from 21% in 2015 to 77% in 2022 (Source: GSMA Report India: on the road to a digital nation). This is backed by factors like high growth in the number of smartphone users, including growth in rural areas, usage of OTT platforms, social media, e-learning, online shopping and companies leaning towards hybrid/flexi working models. The strong growth in smartphone

users and the evolving capabilities of 4G and 5G networks open a much larger addressable market for sectors where internet is needed.

In a major industry development, the Spectrum Auction was conducted across 10 frequency bands i.e. Sub GHz band - 600 MHz, 700 MHz, 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 with a validity of 20 years. It commenced on July 26, 2022 and concluded on August 1, 2022 after 40 rounds of bidding spread over 7 days. The total spectrum placed for auction was 72,098 MHz and out of the total spectrum put to auction ~71% (51,236 MHz) was acquired by the four bidders. The cumulative pay-out amounts of the successful bidders was in excess of Rs. 1,500 Bn.

During the year, government has initiated consultation on Indian Telecommunication Bill proposing comprehensive legislation to replace three laws: the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933, and the Telegraph Wires (Unlawful Possession) Act, 1950. Telecom and Digital Industry is evolving at a rapid pace. The government has recognized this and has proposed a future-fit Telecom Law, doing away with old Acts. It is a step in the right direction, with simplified rules to guide sector forward. It also allows government to respond to evolving situations in order to preserve consumer and larger public interest and maintain competition. Your Company continues to engage with the government on this matter and it is likely to be tabled in the Parliament in the monsoon session.

Digital nation has its foundation in digital infrastructure upon which digital services and applications are created, stored, distributed and consumed. Telecom is at the heart of the digital infrastructure with the potential to reshape the economy by enabling new operating models for businesses and transforming the way citizens interact with the society and environment around them. India is progressing to become a $1-trillion digital economy by 2025 and wireless internet will play a major role. Further, 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.

DISCUSSION ON VODAFONE IDEAS OPERATIONAL PERFORMANCE

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 developing world-class infrastructure to introduce newer and smarter technologies for its retail and enterprise customers. Your Company aims to offer future ready 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 Bn 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 also offers Voice over WIFI (VoWiFi) calling feature for its subscribers in several circles which is gradually expected to expand to rest of the country.

2. Broadband Services

Your Company provides broadband data services on 3G and/or 4G platforms in all 22 service areas of India. Your Companys broadband coverage is available in nearly 341,100 census towns and villages, covering more than a billion of the Indian population. The population coverage on 4G is more than 1 Bn as well, as of March 31, 2023. During Financial Year 2022-23, your Company has been shutting down its 3G network, while it continues to focus on expansion of its 4G network. Your Company has thus seen a steady rise in 4G subscriber penetration (as a percentage of reported subscribers) increasing from 48.4% in Q4FY22 to 54.3% in Q4FY23. 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 todays 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 listen to Music, play Games, watch short Videos and access Jobs portal, Education and skilling propositions on the Vi app.

To provide best in class content to its customers, your Company has tied up with various content creators and OTT apps like ZEE5, Shemaroo Me, Hungama, YuppTV, ZeeTV, Colors, News18, Republic TV, TV Today, Atrangi, Pocket Films, Discovery live channels & VOD. The app provides a wide range of content including 400+ LiveTV channels in HD & SD format, 10,000 movies, TV Shows and short format videos in 16+ Indian languages. Additionally, your Company has product bundling tie ups with leading content providers like Amazon Prime, Disney Hotstar, Sun NXT and Sony LIV for its premium customers.

In line with focus to offer the best of entertainment services to its customers, your Company offers Music streaming service on Vi app for all its customers in association with Hungama Music. Further, your Company offers wide variety of individual as well as multiplayer or social gaming services on Vi app in partnership with OnMobile, a B2C cloud gaming platform. Your Company also provides eSports in partnership with Gamerji, an eSports start-up.

Lastly, your Company also offers Vi Jobs & Education on the Vi App in partnership with ‘Apna that offers free priority access in grey and blue collared space with Indias largest job listing, ‘Enguru, an English learning platform, and ‘Pariksha, a mock test platform which facilitates preparation for government jobs.

4. Other 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. The Companys 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 start-ups. 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

1. Competitive Spectrum Profile

Your Company has a total of 8,005.2 MHz of spectrum across various frequency bands out of which 7,975.2 MHz spectrum is liberalised and can be used towards deployment of any technology (2G, 3G, 4G or 5G). In July 2022 auction, your Company acquired mid band 5G spectrum (3300 MHz band) in 17 priority circles and mmWave 5G spectrum (26 GHz band) in 16 circles to offer superior 5G experience to customers as well as strengthen enterprise offerings and provide new opportunities for business growth in the emerging 5G era. In addition, your Company also acquired incremental 4G spectrum in 3 circles during the auction. This large spectrum portfolio across 22 circles allows your Company to create large broadband capacity and ability to offer better customer experience.

Below table provides the Spectrum held by your Company across all service areas:

Spectrum Frequencies

Circle	900	1800	2100	2300	2500	3300	26000	Total FDD x 2 + TDD
Andhra Pradesh	5.0	10.0	5.0	-	20.0	50.0	200.0	310.0
Assam	-	25.0	5.0	-	20.0	-	-	80.0
Bihar	-	13.4	5.0	-	10.0	50.0	-	96.8
Delhi	10.0	10.6	5.0	-	20.0	50.0	200.0	321.2
Gujarat	11.0	20.8	10.0	-	30.0	50.0	450.0	613.6
Haryana	12.2	15.8	15.0	-	20.0	50.0	400.0	556.0
Himachal Pradesh	-	11.2	5.0	-	10.0	-	-	42.4
Jammu & Kashmir	-	17.0	5.0	-	10.0	-	-	54.0
Karnataka	5.0	15.0	10.0	-	-	50.0	200.0	310.0
Kerala	12.4	20.0	10.0	10.0	20.0	50.0	800.0	964.8
Kolkata	7.0	15.0	10.0	-	20.0	50.0	200.0	334.0
Madhya Pradesh	7.4	18.6	5.0	10.0	20.0	50.0	400.0	542.0
Maharashtra	14.0	12.4	15.0	10.0	30.0	50.0	400.0	572.8
Mumbai	11.0	10.2	10.0	-	20.0	50.0	200.0	332.4
North East	-	25.8	5.0	-	20.0	-	-	81.6
Orissa	5.0	17.0	5.0	-	20.0	-	-	74.0
Punjab	5.6	15.0	10.0	-	20.0	50.0	300.0	431.2
Rajasthan	6.4	10.0	15.0	-	20.0	50.0	300.0	432.8
Tamil Nadu	5.0	11.4	15.0	-	-	50.0	300.0	412.8
Uttar Pradesh (East)	5.6	10.0	20.0	-	20.0	50.0	250.0	391.2
Uttar Pradesh (West)	5.0	15.0	10.0	-	20.0	50.0	350.0	480.0
West Bengal	7.4	23.4	5.0	-	20.0	50.0	400.0	541.6
Total Liberalised Spectrum	135.0	342.6	200.0	30.0	390.0	850.0	5,350.0	7,975.2
Non-Liberalised Spectrum	6.2	CO cd	-	-	-	-	-	30.0
Grand Total	141.2	351.4	200.0	30.0	390.0	850.0	5,350.0	8,005.2

2. 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 large network assets in the form of 2G, 3G, 4G equipment and country wide Optical Fibre Cable (OFC). Your Company has ~184,400 unique towers across 487,000 census towns and villages covering more than 1.2 billion of Indian population. Your Company has over ~443,500 broadband (3G + 4G) sites across over 341,000 census towns and villages. Your Companys broadband coverage stands at over a billion Indian population with presence in ~170,400 unique broadband locations as of March 31, 2023. The 4G population coverage stands at over 1 billion as well, as of March 31, 2023. Your Company has a combined portfolio of almost 294,000 km of OFC including own built and Indefeasible Right of Use (IRU) OFC, and excluding overlap. Your Company also has Pan-India Voice over LTE (VoLTE) services and has also started to offer VoWiFi services in select circles, which will be gradually rolled out in rest of the country.

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.

3. Large Subscriber Base

Your Company has 225.9 Mn subscribers as of March 31, 2023, of which 122.6 Mn are 4G subscribers. As your Company is expanding its 4G coverage and capacity, this large subscriber base provides a great platform to upgrade voice only customers to users of data, content and other digital services.

4. Power Brand

Your brand ^Ul, 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 ^Ul is building a competitive advantage by increasing customer engagement and heralding a new digital ecosystem with Music, Games, Ads, Jobs & Education Services. In line with the Companys strategy of accelerating unlimited base & 4G adoption through differentiated product offerings, VIL continued to promote the Hero Unlimited Pack for prepaid users which highlighted the benefits of Unlimited night data, weekend data rollover across TV & digital. The refreshed postpaid plan offering more benefits, more data, more entertainment & more privileges - Vi Max postpaid, with differentiated offering from competition was promoted extensively through TV, digital & retail.

In a country which is passionate about cricket, your Company engaged with users through Vi 20 FANfest on social media and stayed one of the buzziest brand of the IPL 2022 and Womens IPL 2023. Your Companys communication strategy focused on strengthening brand stature by leveraging on the fastest 4G credentials with the #BestIsGettingBetter campaign. A #SpeedSeBadho song was created in collaboration with Raftaar to build affinity with the youth, the song was trending on YouTube. A one of a kind integration was done with Kaun Banega Crorepati, a television gameshow, introducing ‘KBC Golden Week with Vi giving Vi consumers a chance to sit at the coveted hot seat and Amitabh bachchan calling seamlessly through video call to a friend was made possible through Vi - Indias fastest 4G.

All these initiatives have been extensively promoted across TV, Digital as well outdoor media, which is leading to stronger perception, improving customer engagement as well as brand affinity.^Ul Brand has won several industry recognitions. Vi won the best social media brand in Telecom and the best use of Video for Rs.#LookUp this Diwali campaign at the SAMMIES 2022. Vi won the Silver Award for Meme Marketing at ET Brand Equity SPOTT Awards 2022. Vi was awarded Silver for Best Use of Topical Posts in a Campaign at the E4M Indian Digital Marketing Awards 2022. Vi also won two awards in the ET Brand Equity - India DigiPlus Awards 2023 i.e. Silver for Best Use of Performance Marketing and bronze for Digital Campaign in the B2B Category.

Overview of Key strategic initiatives

Your Companys core priority has been to focus on providing superior customer experience and drive differentiation through partnerships, all this with the aim of improving cash generation in existing businesses and drive monetization in the new revenue streams. Resultantly, Financial Year 2022-23 is the first year where your Company has registered annual revenue growth post-merger despite various challenges

being faced, clearly reflecting its ability to effectively operate and compete in this market. Your Company has reported seven quarters of sequential growth in several key metrics including ARPU and 4G subscribers. In fact, the YoY ARPU growth of 9.3% in Quarter 4 of Financial Year 2022-23 is highest amongst wireless operators. All of this is possible only because your Company is focused on below strategic initiatives to improve revenue and profitability as well as to strengthen its overall position in the market :

1. Focus on Network Investments

Your Company, continues to have a focused approach to investments, biased towards its 17 priority circles, which contribute 98% of its revenue and 93% of industry revenue, to further strengthen its position in these markets as most of the incremental capex is being directed towards these 17 circles.

During Financial Year 2022-23, your Companys network investments were focused on expanding high speed broadband network coverage and capacity by rolling out new sites, upgrading our core and transmission network as well as refarming 2G & 3G spectrum to 4G. Your Company has closed around 26,700 3G sites during the year and most of these sites already had one carrier of 2100 MHz band deployed towards 4G. Resultantly, our broadband site count stands at 443,537 vs 455,264 a year ago despite adding almost 15,000 new 4G sites during the year. 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.

Your Companys relentless pursuit to offer better 4G experience, through integration and incremental network investments post-merger, is visible through the top rankings across various third party reports on both data and voice during the year. Your Company also had the highest rated voice quality in the country as per TRAIs "MyCall" app data for 25 out of 29 months consecutively between November 2020 and March 2023. This is not only providing a great experience for its customers but also helping your Company drive stronger network perception leading to better customer response in the market.

Your Company has the advantage of having latest 4G equipment and technologies which are capable of upgrade to 5G. Your Company has already deployed and using an array of 5G technologies such as Massive MIMO, DSR, Open RAN,

Cloudification of core etc. Your Company is working towards rolling out 5G for consumers and will be ready to take off with 5G once funding is in place. In the meantime, your Company has live 5G clusters in Delhi and Pune where it has partnered with various OEMs to test compatibility of available 5G handsets. Further, your Company is in advanced stages of discussion with various network vendors for finalisation of the 5G rollout strategy.

2. Market initiatives to improve ARPU

Your Companys priority remains on driving ARPU improvement.

While the tariff hike in November 2021 was a step in the right direction, ARPUs are still far from being sustainable. Tariff increases remain 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 ran several campaigns to incentivize 2G handset customers upgrading to smartphones including cashback on monthly recharges and 0% Interest EMI Schemes on Device Financing in conjunction with OEMs and NBFCs.

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

Your Company is well positioned in enterprise offerings across the industry verticals and has built strong relationships with its enterprise customers by providing Enterprise grade solutions and services over the last several years. Business Services will always remain a strength area for your Company given its long standing relationships with its enterprise customers

and global know how of Vodafone Group, which provides strong platform for future growth in this segment. Despite the challenging environment, your Company has seen strong growth in several of the non-mobility enterprise segments during the year.

Your Company is progressing ahead in its stated strategy of transformation from Telco to TechCo. Vi Business continues to maintain strong positioning in IoT offerings which is an emerging segment and has potential to grow multi fold in the near future amid Governments push towards ‘Digital India and ‘Smart Cities. With Vi Integrated IoT Solutions, Vi Business offers a secure end-to-end IoT solution, across industries, for Smart Infrastructure, Smart Mobility and Smart Utilities. In line with our strategy towards innovation in IoT, we have recently showcased our industry first IoT lab to test and certify IoT devices. Our IoT Lab has been built in partnership with C-DOT, with an aim to simplify IoT solutions deployment and bring standardization and interoperability among IoT devices and applications as per ‘One M2M standard in the country.

In new business streams, your Company has launched "Vi Secure" in collaboration with global technology leaders providing comprehensive cyber security portfolio with a range of reliable solutions that offers protection against multiple threats arising from network, cloud and end points, enabling businesses to achieve their digital objectives in a secure manner. Further, in the growing hybrid working scenario, Vi Business Plus Mobility Bundling solutions are enabling todays mobile workforce to connect, communicate, collaborate and do a lot more with their postpaid plans. Bundled with benefits such as data pooling, mobile security, location tracking and entertainment, Vi Business Plus provides superior customer experience, with seamless and uninterrupted high speed data. The award winning digital experience offerings such as Vi App, Vi Business-Wireline & Vi Business-Mobility are allowing organizations to manage from anywhere and at any time with least manual intervention. Vi Business has been recognized for innovation and excellence in Customer Service and for Vi Business Hub, at Voice and Data Awards 2023.

Your Companys technology leadership in IoT eSIM and Mobility eSIM has been globally recognized by Counterpoint in their L.E.A.D.E.R benchmark for eSIM ecosystem. Vi Business was recognized for Best Innovation and Creativity in B2B Marketing for ReadyForNext at the Mint Marketing Awards 2022. Vi Business has also been recognized by Frost & Sullivan for Indian Cellular IOT Connectivity Service Provider Company of the Year 2022 and Indian SIP Trunking Technology Innovation Leadership Award 2022. At CIO Choice

2023, Vi Business has been chosen as the preferred partner of choice for SIP Trunk, Telecom Carrier (Mobile Access), Managed Mobility Services, Cloud Telephony and Telecom Carrier (International access) on the basis of an extensive Pan-India CIO referral voting process that spans across industry verticals. Vi Business Carrier services has been awarded with the A2P SMS Monetization of the Year Award (India) at Asian Telecom Awards 2023.

4. Driving Partnerships and Digital Revenue Streams

Your Company continues to focus on its platform capabilities to offer deeper integration with its partners for a differentiated experience, create monetization opportunities and truly become an integrated digital service provider. Your Company offers "best-in-class" content in partnership with several global and regional content aggregators.

Your Company is seeing strong growth on the Movies, live TV and Music users on Vi app. This is on the back of various curated content and events that were created for the users. In order to drive deeper engagement on Music, LIVE music concert was launched on Vi app wherein renowned bands & artists like, Indian Ocean, Sunidhi Chauhan, Euphoria, Sara Gurpal and Mame Khan had performed. Your Company continues to explore such relevant entertainment experiences. With aim to build relevant propositions to be able to drive meaningful engagement, your Company launched a new channel - BYTES on Vi app in partnership with NDTV to provide quick bytes of trending news & stories across sports, films & lifestyle as snackable content is in huge demand.

During the year, your Company enhanced its gaming proposition in partnership with OnMobile 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. The uniqueness of the proposition is evident with the depth of engagement wherein average gameplay time per user is over 30 minutes in a day. Your Company has also launched eSports into Vi Games which is a growing phenomenon, especially amongst youth, in partnership with eSports start-up Gamerji. It has not only enabled users to engage in eSports through the range of tournaments on Vi platform, but also introduced live streaming of eSports tournaments for our users, which again, is a fast growing category.

Your Company has also launched our 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 going to help us drive the monetization of our digital users as we aggressively build anc scale our digital assets. Vi Ads is now empaneled with almost all the top media agencies and we are part of the media plar for some of the big brands in the country.

On the back of all these digital initiatives, your Company has witnessed considerable growth in its Monthly Average Users on the digital app and expects to witness further acceleration in Financial Year 2023-24. 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.

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 theii subscribers and bridging the digital divide that separates urban from rural.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS BASED ON STANDALONE FINANCIAL

The key financial ratios are as under:

Particulars	2022-23	2021-22
Debtors Turnover Ratio (number of days)1	20	23
Current Ratio2	0.38	0.47
Debt Equity Ratio3	(2.73)	(3.11)
Debt Service Coverage Ratio4	0.25	0.27
Interest Service Coverage Ratio5	0.33	0.38
Operating Profit Margin (%)Rs.	(15)%	(19)%
Net Profit Margin (%)	(70)%	(74)%
Return on Net Worth (%)	NA	NA

1 Debtors Turnover Ratio (number of days) = (Average trade receivables/ Revenue from operations)*Number of days during the period.

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 (improved mainly due to higher revenue).

7 Net Profit Margin (%) = Net Profit/(loss) after tax / Revenue from operations.

8 As the Net-worth is negative as on March 31, 2023 and March 31, 2022.

DISCUSSION ON CONSOLIDATED FINANCIAL RESULTS

Revenues

Revenue from operations for the Financial Year ended March 31, 2023 increased by Rs. 36,617 Mn and stood at Rs. 421,772 Mn for the Financial Year ended March 31, 2023 as compared to Rs. 385,155 Mn for the Financial Year ended March 31, 2022, primarily due to tariff hikes, improving subscriber mix and 4G subscriber additions.

Other Income comprising of interest income and gain on Mutual Funds and Others stood at Rs. 3,113 Mn for the Financial Year ended March 31, 2023 as compared to Rs. 1,294 Mn for the Financial Year ended March 31, 2022. The increase is mainly on account of increase in interest income amounting to Rs. 1,594 Mn, gain on Mutual Funds by Rs. 110 Mn, Others by Rs. 115 Mn.

Operating Expenses: Total operating expenditure for the Financial Year ended March 31, 2023 increased by Rs. 28,808 Mn to Rs. 253,602 Mn from Rs. 224,794 Mn incurred for the Financial Year ended March 31, 2022.

Employee Benefit Expenses: Employee benefit expenses for the Financial Year ended March 31, 2023 stood at Rs. 18,663 Mn from Rs. 17,351 Mn for the Financial Year ended March 31, 2022 resulting in increase of Rs. 1,312 Mn primarily due to increments in salary.

Network Expense and IT Outsourcing Cost: Network Expense and IT Outsourcing Cost increased by Rs. 2,601 Mn from Rs. 98,182 Mn for the Financial Year ended March 31, 2022 to Rs. 100,783 Mn for the Financial Year ended March 31, 2023 primarily due to increase in power and fuel expenses, repairs and maintenance - plant and machinery expenses and IT outsourcing cost to Rs. 57,667 Mn, Rs. 28,153 Mn and Rs. 7,536 Mn for the Financial Year ended March 31, 2023 from Rs. 56,579 Mn, Rs. 26,969 Mn and Rs. 6,939 Mn for the Financial Year ended March 31, 2022 respectively.

License Fees and Spectrum Usage Charges: License Fees and Spectrum Usage Charges decreased by Rs. 1,967 Mn from Rs. 41,988 Mn for the Financial Year ended March 31, 2022 to Rs. 40,021 Mn for the Financial Year ended March 31, 2023, primarily as a result of decrease in SUC rates due to spectrum acquisition done in August 2022.

Roaming and Access Charges: Roaming and Access Charges increased by Rs. 9,836 Mn from Rs. 29,155 Mn for the Financial Year ended March 31, 2022 to Rs. 38,991 Mn for the Financial Year ended March 31, 2023.

Subscriber Acquisition and Servicing Expenditure:

Subscriber Acquisition and Servicing Expenditure, increased by Rs. 17,069 Mn from Rs. 19,711 Mn for Financial Year ended March 31, 2022 to Rs. 36,780 Mn for Financial Year ended March 31, 2023 primarily due to higher amortisation of cost capitalised.

Advertisement, Business Promotion Expenditure and Content Cost: Advertisement, Business Promotion Expenditure and Content Cost decreased by Rs. 379 Mn from Rs. 9,791 Mn for the Financial Year ended March 31, 2022 to Rs. 9,412 Mn for the Financial Year ended March 31, 2023 primarily due to decrease in Advertisement and Business Promotion Expenditure.

Other Expenses: Other expenses increased by Rs. 328 Mn from Rs. 8,546 Mn for Financial Year ended March 31, 2022 to Rs. 8,874 Mn for the Financial Year ended March 31, 2023 primarily due to higher travel and conveyance cost.

The composition of total operating expenses (amount and percentage to total operating expenses) are as follows:

Earning before Finance Costs, Depreciation, Amortisation, Exceptional Items and Taxes (EBITDA) The EBITDA has increased by Rs. 9,628 Mn from Rs. 161,655 Mn for Financial Year ended March 31, 2022 to Rs. 171,283 Mn for Financial Year ended March 31, 2023. EBITDA as a

percentage of Total Income decreased to 40.3% compared to 41.8% for Financial Year ended March 31, 2022.

Depreciation, Amortisation and Finance Costs

The depreciation charge for the year has decreased by Rs. 3,985 Mn from Rs. 146,569 Mn for Financial Year ended March 31, 2022 to Rs. 142,584 Mn for Financial Year ended March 31, 2023. The amortisation charge for the year has decreased by Rs. 1,361 Mn from Rs. 89,274 Mn for Financial Year ended March 31, 2022 to Rs. 87,913 Mn for Financial Year ended March 31, 2023.

Finance Costs for Financial Year ended March 31, 2023 increased by Rs. 23,735 Mn from Rs. 209,808 Mn to Rs. 233,543 Mn, primarily due to increase in interest on lease liabilities.

Exceptional Items

Exceptional Items for the Financial Year ended March 31, 2023 amounting to Rs. (224) Mn comprises of (Loss) / Gain on remeasurement of leasehold land.

Profits and Taxes

The loss before tax for the Financial Year ended March 31, 2023 stood at Rs. 292,976 Mn as compared to a loss of Rs. 282,341 Mn for Financial Year ended March 31, 2022. The loss after tax for Financial Year ended March 31, 2023 stood at Rs. 293,011 Mn as compared to a loss of Rs. 282,454 Mn for Financial Year ended March 31, 2022.

Capital Expenditure

During the Financial Year 2022-23, the capital expenditure (including capital advances and excluding RoU assets and Spectrum) incurred was Rs. 31,527 Mn. Further, the Company has incurred Rs. 1,977 Mn towards Bandwidth. In addition to this, the Company has acquired spectrum of Rs. 187,863 Mn (consisting of upfront payment of Rs. 16,800 Mn and balance Rs. 171,063 Mn towards deferred payment obligation).

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 Rs. 3,334,732 Mn and Rs. 1,741,316 Mn respectively as at March 31, 2023. Investment in joint venture and associate stood at Rs. 58 Mn (net of provision for impairment) primarily due to share of profit in joint venture. Non-current and current other financial assets decreased by Rs. 29,564 Mn from Rs. 148,653 Mn to Rs. 119,089 Mn primarily due to decrease in cash and cash equivalents and other bank balances. Other assets (non-current and current) decreased by Rs. 8,360 Mn from Rs. 219,696 Mn to Rs. 211,336 Mn primarily

due to decrease in advance tax and GST recoverable which is offset by increase in Costs to obtain a contract with the customers. Deferred tax assets as at March 31, 2023 stood at Rs. 135 Mn as compared to Rs. 60 Mn as at March 31, 2022. Assets classified as held for sale (AHFS) stood at Rs. 493 Mn as at March 31, 2023.

The paid-up equity share capital of the Company increased by Rs. 165,609 Mn during the year pursuant to issuance of 16,133,184,899 equity shares to Government of India (GOI) as part of conversion of NPV of interest related to deferment of spectrum auction installments and AGR dues and 42,76,56,421 equity shares to promoter group entity due to exercise of conversion option against share warrants.

Other equity of the Company decreased from Rs. (940,836) Mn as at March 31, 2022 to Rs. (1,230,388) Mn as at March 31, 2023 mainly due to loss during the year Rs. 292,900 Mn which is offset by increase in securities premium. As on March 31, 2023, the total equity stood at Rs. (743,591) Mn as compared to the total equity of Rs. (619,648) Mn for Financial Year ended March 31, 2022.

Long term and short term borrowings increased by Rs. 106,683 Mn and stood at Rs. 2,015,860 Mn as on March 31, 2023 primarily due to new spectrum acquired during the year, annual accrued interest addition on spectrum obligation and AGR dues which is offset by conversion of loan relating to interest on deferred spectrum instalments and AGR dues into equity and loan repayments during the year.

Non-current and current other financial liabilities increased by Rs. 149,350 Mn and stood at Rs. 718,402 Mn for Financial Year ended March 31, 2023 primarily due to increase in lease liabilities, increase in interest accrued but not due, increase in accrual towards One Time Spectrum Charges (OTSC) and increase in trade payables which is primarily off-set by decrease in payables for capital expenditure.

Non-current and current other liabilities and provisions increased by Rs. 46 Mn from Rs. 81,710 Mn for Financial Year ended March 31, 2022 to Rs. 81,756 Mn as on March 31, 2023 mainly due to increase in Taxes, Regulatory and Statutory Liabilities which is primarily off-set by decrease in deferred revenue and advance from customers.

Cash Flow Statement

The cash generated from operations of Rs. 188,687 Mn, proceeds from allotment of equity shares under share warrant of Rs. 4,320 Mn, proceeds from borrowings of Rs. 35,824 Mn, interest received of Rs. 941 Mn and Net sale of current

investments amounting to Rs. 290 Mn which was primarily used for net repayment of lease liabilities and borrowings of Rs. 165,999 Mn payment towards capital expenditure (net of sale proceeds) Rs. 38,565 Mn, payment of interest and finance charges Rs. 20,940 Mn, payment towards spectrum and licenses - upfront payment of Rs. 16,800 Mn and placement of Fixed Deposits with banks having maturity of 3 to 12 months of Rs. 2 Mn. Consequently, Cash and Cash Equivalents as at March 31, 2023 stood at Rs. 2,288 Mn.

HUMAN RESOURCE MANAGEMENT

Your Companys 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 and Pandemic Care

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. We are happy to share that Vodafone Idea Limited has been recognised as being among the 100 best companies to work for Women in India by Avatar & Searmount BCWI Study 2022.

RISK MANAGEMENT

The Risk Management framework of your Company ensures regular review by management to proactively identify the emerging risks, to do risk evaluation and risk prioritization along with development of risk mitigation plans and action taken to minimize the impact of the risk. The framework requires that the Risk Management Committee be periodically informed about risk minimization procedures adopted by your Company. These processes are also periodically reviewed by

management. The various risks, including the risks related to the economy, regulation, competition, technology etc. are documented, monitored and managed efficiently.

REGULATORY

Major regulatory developments for the period are:

1. Auction of Spectrum 2022

On April 11, 2022, TRAI submitted its recommendations on ‘Auction of spectrum in frequency bands identified for IMT/5G. Thereafter, the Spectrum Auctions were conducted by Department of Telecommunications (DoT) in July, 2022. Your Company participated in the auctions and acquired 6,237 MHz of spectrum across 2100 MHz, 2500 MHz, 3300 MHz and 26 GHz bands at an aggregate value of Rs. 187.86 Bn. Post July 2022 spectrum auction, your Companys overall spectrum holding is 8005.2 MHz across different frequency bands out of which 7975.2 MHz spectrum is liberalized and can be used towards deployment of any technology (2G, 3G, 4G or 5G).

2. Draft Telecommunications Bill

In July 2022, the Government initiated the consultation process on ‘Need for a new legal framework governing Telecommunication in India based on the consultations and deliberations, a draft Indian Telecommunication Bill, 2022 was released for further consultations on September 21, 2022. The draft bill carries provisions for right of way for Telecom Infrastructure, Restructuring, Defaults in Payment and Insolvency, a special framework for governing defaults, provision for an alternate dispute resolution mechanism, establishment of a telecom development fund, measures for protection and duty of users, prescribing matrix of penalties laying down principles of nexus and proportionality, etc. The final bill once promulgated will result in the repeal of the Indian Telegraph Act, 1885, the Indian Wireless Telegraphy Act, 1933 and the Telegraph Wires (Unlawful Possession) Act, 1950. Your Company also participated in the consultation process and submitted its written comments to the Department of Telecommunications. Further, your Company continues to engage with Department of Telecommunications to develop a modern and future-ready legal framework in telecommunications.

3. Issuance of Equity Shares to Government of India under Telecom Reforms Package of 2021

On September 15, 2021, the Government announced a comprehensive reform package for the Indian telecom

sector including measures to address the structural, procedural and liquidity issues. To address the immediate liquidity concerns of the sector, Government provided an option of up to four years of moratorium on AGR dues and spectrum instalments due between October 2021 and September 2025 with an option to convert interest arising from such deferment into equity upfront. Your Company had opted for deferment of Spectrum and AGR dues as well as conversion of interest arising from such deferment into equity.

Further, on January 10, 2022, the Board of your Company also approved the upfront conversion of the full amount of interest arising due to deferment of spectrum instalments and AGR dues into equity.

Accordingly, in line with the Reforms and Support Package for Telecom Sector communicated earlier and the conversion option exercised by the Company as provided for therein, Ministry of Communications, Government of India passed an order on February 3, 2023 under section 62(4) of the Companies Act, 2013, directing the Company to convert the loan representing the NPV of the interest related to deferment of spectrum auction instalments and AGR dues into equity shares to be issued to the Government of India. The total amount ascertained for conversion into equity shares was Rs. 161,332 Mn.

Subsequently in a meeting held on February 7, 2023, the Board of Directors of the Company allotted

16,133,184,899 equity shares of face value of Rs. 10/- each at an issue price of Rs. 10/- per equity share to Department of Investment and Public Asset Management, Government of India (acting through President of India).

4. Moratorium for AGR related dues upto Financial Year 2018-19

In line with the Reforms and Support Package for Telecom Sector, as approved by the Union Cabinet in September 2021, the Department of Telecommunications offered the deferment of AGR related dues upto Financial Year 2018-19 and not tabulated in the Honble Supreme Court order dated September 1, 2020 by four years, with NPV protected, along with revised payment schedule. Further, your Company was also given a one-time opportunity to exercise the option for equity conversion of interest dues upfront.

Your Company opted for deferment of the above dues by four years in June22. Your Company however did not opt for conversion of interest dues arising out of deferment of AGR dues pertaining to this specific moratorium into equity.

5. Right of Way Reforms 2022

The Government of India has continued with its reforms process and announced Indian Telegraph Right of Way (Amendment) Rules, 2022. These amended rules, inter- alia, incorporate provisions for usage of street furniture for installation of small cells and telegraph line. Fees and charges for seeking RoW permissions by the Telecom Service Providers (TSPs) and Infrastructure Providers (IPs) have also been rationalized to bring uniformity across the country.

Further, the Government of India has also launch "Gati Shakti Sanchar" Portal to streamline the process of Right of Way (RoW) Applications and permissions across the Country. The portal acts as an enabler for "Ease of doing business" for telecommunications infrastructure works by enabling applicants from various Telecom Service Providers (TSPs) as well as Infrastructure Providers (IPs) to apply at a common single portal for Right of Way permissions to lay down Optical Fiber Cable and for erecting mobile towers.

6. Draft Digital Personal Data Protection Bill 2022

The Government of India released the draft of the Digital Personal Data Protection Bill on November 18, 2022 for public consultation. The Explanatory Note accompanying the Bill stated that the Bill is based on 7 universal/global principles of the Data Economy viz. (i) fair, transparent and lawful usage of personal data, (ii) purpose limitation of personal data, (iii) data minimization, (iv) data accuracy, (v) storage limitation, (vi) data safeguards/ security and (vii) data accountability and further that in drafting the Bill, the Government had considered inputs received on the earlier draft of the Bill and also data protection legislations of Australia, EU, Singapore, and prospective legislation of USA. The Bill covers the rights and duties of the data fiduciaries and also the users, contains special provisions with regard to transfer of personal data outside India and exemptions, lays down a compliance framework including setting up of a data protection Board and power to make rules and amend schedules, etc.

7. Rating of Buildings or Areas for Digital Connectivity

On February 20, 2023, TRAI issued its recommendations that Digital Connectivity Infrastructure (DCI) be made an essential component of building development plans on the lines of water, electricity, gas, fire safety, etc. and that the Property Manager (PM) of the building should allow DCI access to all service providers in a fair, nonchargeable, transparent & non-discriminatory manner and should not enter into any exclusive arrangements/ agreements with any infrastructure/service provider.

TRAI further recommended that the PM should ensure that the licensee compulsorily gives access of such equipment to all service providers in a fair, transparent, non-discriminatory and non-exclusive manner and the proviso for compulsory sharing of active wireless equipment in buildings to be made part of Unified License.

To encourage sharing, TRAI also recommended that the revenues earned by sharing of active wireless equipment, as part of DCI, should not attract License Fees.

Further, TRAI recommended establishing a Council of DCI (CoDCI) under DoT, MoC in collaboration with MoHUA, or any other appropriate organisation/institution. This CoDCI will be responsible for all decisions for certification, registration & capacity building of DCI Professionals. It has also recommended that Rating of Buildings for digital connectivity would be made mandatory for all existing and new buildings of public importance within 2 years of issue of regulatory framework by TRAI or 2 years from obtaining Occupancy Certificate, whichever is later.

8. Use of Street Furniture for Small Cell and Aerial Fiber Deployment

On December 29, 2022, TRAI recommended that all Central Government entities should earmark dedicated spaces in their existing and planned buildings/structures to install Digital Connectivity Infrastructure including small and macro cells. All such spaces should be GIS mapped and made available on portal for charge free use by TSPs/IP-Is on non-discriminatory basis. Such advisory guidelines are also to be issued to State Governments for similar action by their entities.

Further, TRAI recommended enabling provisions or suitable terms and conditions in all telecom licenses and IP-I registration agreement prohibiting TSPs/IP-I

providers from entering into any exclusive contract or right of ways with infrastructure owners/CAAs or any other authority. All asset controlling authorities are also prohibited to enter into exclusive rights/exclusive tie-up with any licensee/registration holder to ensure street furniture infrastructure is offered in a non-exclusive and non-discriminatory manner.

Furthermore, TRAI recommended that the charges paid by lessee TSP to lessor TSP for use of shared infrastructure should be reduced from the Gross Revenues of the lessor TSP to arrive at Applicable Gross Revenue (ApGR) of such Lessor TSP.

Also, it has been recommended that Low Power Base Transceiver Stations (LPBTS) be defined as those BTS that radiate EIRP< = 600 W and such equipment/small cells be exempted from seeking permission from any authority except from the street furniture/building owning Agency at all places. DoT to increase the current radiating limit from 100 W to 600 W to cover most of the Small Cells/LPBTSs that are being deployed. Considering the sheer volume of Small Cells, TRAI recommended that self-certification criteria for LPBTS be relaxed to five years.

9. AGR matter

Application was filed by the Company in AGR matter in Honble Supreme Court seeking modification of the Honble Supreme Court Order dated September 1, 2020, to clarify that it does not bar DoT from considering submissions of the Company on manifest errors, has been dismissed by the Honble Supreme Court on July 23, 2021.

Subsequently, on August 10, 2021, the Company filed a review petition with the Honble Supreme Court for considering to hear the modification application again and the same is pending for final disposal.

Opportunities, Risks, Concerns and Threats

The prevalent hyper-competition over the last few years has led the Indian mobile industry to consolidate from 8-10 operators to an optimal structure of three private operators and one government operator. The telecom reform package announced by the Government in September 2021 was another step to ensure healthy competition in the sector. Indian telecom operators are well poised to benefit from the compelling macro-economic backdrop, growth in smartphone usage and growing digital adoption. All the existing

telecom service providers, operators have made significant investments towards expanding broadband network across the country. Due to lack of adequate infrastructure, the growth of wired internet has been restricted to major cities as a result of which wireless remains the preferred means of connecting to the internet. The increasing 4G coverage and low priced 4G services have led to significant increase in 4G users. However, there is significant headroom for broadband wireless penetration (as a percentage of population) to improve further as rest of India upgrades towards broadband connectivity. The growth in social media usage, rapidly increasing content consumption and growth in online commerce coupled with introduction of 5G will continue to drive demand for broadband services.

The key strategic initiatives of your Company along with its competitive spectrum footprint across circles, significant network investments and customer affinity to its unified brand ^Ul 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. During the year, your Company acquired mid band 5G spectrum (3300 MHz band) in 17 priority circles, mmWave 5G spectrum (26 GHz band) in 16 circles and incremental 4G spectrum in 3 circles in the spectrum auction conducted by DoT. 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 is closely watching the development on the 5G front and gearing itself to offer 5G services in the near future.

Your Companys 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.

There exists material uncertainty relating to your Companys ability to continue as a going concern which is dependent on its ability to raise additional funds as required, successful negotiations with lenders on continued support and generation of cash flow from operations that it needs to settle/renew its liabilities/guarantees as they fall due. As of date, your Company has met all its debt obligations.

Outlook

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 once funding is in place. Your Company will continue to focus on improving ARPU by driving the penetration of Unlimited (UL) 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 expanded its digital offering during the years and will look to scale up such offerings with the intent of monetization. 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. Your Company has acquired mid band 5G spectrum (3300 MHz band) in 17 priority circles, mmWave 5G spectrum (26 GHz band) in 16 circles and incremental 4G spectrum in 3 circles to prepare itself for the next leg of growth in the industry. During the year, promoter group invested further Rs. 4.4 Bn in your Company taking the total fund infusion to Rs. 49.4 Bn between Mar22 and Jun22. In February 2023 your Company has issued equity shares to the Government consequent to conversion of the interest related to deferment of AGR and spectrum dues. Further, ATC has subscribed to Optionally Convertible Debentures amounting to Rs. 16 Bn clearly reflecting the relationship that the Company shares with its key vendors, their belief in long term prospect of the Company and builds confidence towards further capital raise. Your Company remains engaged with lenders and investors for further fund raising. All these initiatives coupled with the support provided by the Government reforms package will enable your Company to make network investments and compete effectively to improve its competitive position.