MUMBAI: The Aditya Birla Group and Vodafone Group Plc are alarmed at the sharp erosion in their telecom JV Vodafone Idea’s user base, with the carrier having lost about 20 million subscribers to competition in the two quarters to March, top officials familiar with the matter say. Analysts say that the company may have lost a further 15 million subscribers for the quarter ended June 30.The falling numbers have prompted discussions among the promoters around the future of the company, even if the telco was to be allowed by the Supreme Court to pay its adjusted gross revenue (AGR) dues over 20 years, said one of the officials. That is because a sharp fall in the number of subscribers would have to be reversed to secure the company's future. That might need capital infusion by the promoters or other strategic investors and it's unclear if this will happen.“The AGR relief is a separate issue and unconnected with the dim business prospects we face. The business is hanging by a thread," said another official. “Already the competitors are displaying their heft in the market place”.Axis Capital expects loss-making Vodafone Idea to have lost another 15 million users in the April-June period, a period when Jio is expected to have added around 6 million with Airtel maintaining or increasing its subscriber base a tad. Analysts say under investment in network and aggressive rivals in Reliance Jio and Bharti Airtel are weaning away subscribers from Vodafone Idea.Since the merger in August 2018 when it was the runaway subscriber market leader with 408 million users, the telco has lost 117 million subscribers to close the March quarter with 291 million, compared with 388 million for Jio and 284 million for Airtel. The telecom regulator's data however puts Vodafone Idea below even Airtel's subscriber numbers.To be sure, if Vodafone Idea were allowed to pay AGR over a 20-year time period - as proposed by the government - it will be part of a three-private player telecom market serving over a billion subscribers, with tariffs and average revenue per user (ARPU) on the rise, backed by surging data consumption.Analysts however say, even with that, the telco would need a significant capital infusion to be competitive in the market.But the promoters may not be inclined to infuse any more capital, with officials saying that the Aditya Birla Group has other financial challenges to deal with and cannot spare further investments for the bleeding company.Vodafone Group, on its part, has been paying up parts of the roughly Rs8,000 crore that the two JV partners had agreed to, as per a contingent liability mechanism (CLM). As per that agreement, the UK-based telecom major - which needs to pay on set dates - is set to inject another EUR35 million (Rs285 crore) by September, after putting in $200 million in April. But it has previously said it won’t infuse any fresh equity. The two partners though had infused about Rs18,000 crore in the telco as part of a Rs25,000-crore rights issue in April 2019.Also, there have been no progress on any talks for fresh infusion of funds from external investors, the official added. Late May, Financial Times reported that Google was exploring an investment in Vodafone Idea, while there has also been unconfirmed speculation about similar interest from Amazon.76861529In a bid to rationalize costs amid growing losses, the telco - which has completed integration in 92% of India's districts - is also letting go of employees post bunching its 22 circles into 10 clusters, one of the people quoted above said. "There have been atleast three rounds of layoffs after it dismantled the circle base structure and moved to a cluster-based structure.”The Birla group, the Vodafone Group and Vodafone Idea declined to comment to ET’s specific queries. The telco’s stock ended 3.3% lower at Rs9.26 on the BSE Wednesday.The telco last week posted a loss of Rs 11,643.5 crore for the fiscal fourth quarter, its seventh successive three-month period in the red, hurt by loss of subscribers, high finance costs and a one-time charge related mainly to its statutory dues, despite full impact of the December tariff hikes. Annual loss in FY20 stood at Rs 73,878 crore, the highest ever by any Indian firm. In the 4QFY20 results release, the carrier, which has to pay Rs 51,400 crore more in AGR dues, again warned of continued threat to its viability unless the Supreme Court allows it to pay in instalments over several years, besides being able to renegotiate repayment terms with its lenders. The telco has backed a government proposal to be allowed to pay AGR dues over 20 years.“Vodafone idea is struggling financially amid shrinking subscriber base, low cash generation and limited financial flexibility to invest in capex…The company is unlikely to survive in the absence of large equity injection,” Nitin Soni, senior director, corporate ratings at Fitch Ratings. “…We believe that the company would have lost more subscribers had there been no coronavirus led lockdown as that prevented active churn to other networks.”Brokerage Motilal Oswal added that subscriber losses, especially in the data market and weakening competitive position was offsetting the positive impact of the price hikes “…11% ARPU (average revenue per user) increase translated into just 6% revenue growth (in 4QFY20)".Credit Suisse added that the telco’s Rs101 billion capex in FY20 is half of Bharti Airtel's India (ex-tower) capex. “…we believe that such prolonged under-investment would result in further market share loss for VIL in longer run”. The operator is also capturing lesser 4G competitors and in the fourth quarter, added 1.4 million only compared to average net adds of 6.9 million in its previous two quarters.