Recently appointed Vodafone Idea chairman Himanshu Kapania told shareholders he is optimistic India’s government will provide support to address the many structural issues faced by mobile operators, as the struggling company looks for ways to return to profitibility.

In a letter, Kapania cautioned the operating environment in the country continued to be challenging due to unsustainable pricing and hyper competition, which have been aggravated by the Covid-19 (coronavirus) pandemic.

Kapania stated the company believes the government recognises “the criticality of the sector” and the importance of retaining healthy competition among private sector operators.

Given the industry remains under “unsustainable financial duress”, he said the company is hopeful the government will support its efforts to generate reasonable returns on its massive investments in 4G and continued expansion of coverage and capacity.

Vodafone Idea’s cost-reduction efforts target INR40 billion ($543.3 million) in annualised savings, of which it achieved 65 per cent by end-June.

Kapania explained the operator is in “a difficult phase”, with the Supreme Court rejecting operators’ request for amendments to adjusted gross revenue (AGR) tax caluculations.