Vodafone Idea has flagged the industry’s “unsustainable financial duress” in its latest annual report and hoped that the government would provide the necessary support to address the issues.

In the chairman’s letter to shareholders, Himanshu Kapania cited persistent challenges in the operating environment, amid “unsustainable pricing” and “hyper-competition” during FY21.

Kapania expressed hope that the government will support efforts to generate reasonable returns on massive investments.

“As the industry continues to remain under unsustainable financial duress, your company is hopeful that the government will provide the necessary support to address all structural issues faced by the sector,” said Kapania who was elected by the VIL board as non-executive chairman after Kumar Mangalam Birla stepped down from the position in early August.

While the operating challenges remain, increasing digital penetration that has got a further boost during the pandemic remains a massive opportunity for the telecom industry especially when the pricing revives in future, said the company.

VIL “believes the government recognises the criticality of the sector and the importance of retaining healthy competition amongst private sector operators”.

“...while the company awaits the government’s final decision, it will continue to remain focused on providing quality service to the customers,” Kapania added.

The longer-term prospects for the Indian economy continue to be robust, as initiatives such as privatisation of PSUs, monetisation of assets, implementation of National Infrastructure Pipeline are expected to spur a virtuous cycle of investments and growth in the medium-term.