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Vi expects 5G rollout in 6-9 months after FPO

Source: PTI
April 15, 2024 20:42 IST
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Ahead of its Rs 18,000 crore further public offer (FPO), Vodafone Idea on Monday said it expects to roll out 5G services in select pockets within 6-9 months of raising fresh capital.


Photograph: Anushree Fadnavis/Reuters

Its chief executive Akshaya Moondra said rollout of the modern 5G telecom services is one of the objectives of raising the capital from the public and once the funding comes, it will start work on the rollout.

"With this round of funding, we believe we will be able to (come) back to participate in the industry growth which has not been possible," he said.


The third largest telco in the country has been ceding subscribers to Reliance Jio and Airtel for the last few months.

Both rivals offer 5G services to its clients.

The company has not been able to roll out 5G services till now because of lack of funds, Moondra said, pressing for a tariff hike.

The 5G rollout will cover 40 per cent of the company's overall revenue base in the next 24-30 months, Moondra said, without sharing a specific target on when the rollout will happen.

A sum of Rs 5,720 crore from the FPO will be utilised for 5G rollout, he said, adding that testing and vendor conversations have already begun.

However, he did not specify the locations where the rollout will happen.

Moondra also spelled out the company's priorities for the future, which will include customer retention, increasing the average revenue per user (ARPU) and network investments.

Of the Rs 18,000 crore FPO, which is likely to be followed by a Rs 2,075-crore preferential share issue to the promoters, Moondra said Rs 15,000 crore has been earmarked for specific purposes, including the 5G rollout and other investments.

The 5G rollout will also involve loans from banks, he said, adding that it has been in touch with lenders towards the same.

He, however, did not share a quantum of the borrowing to be done.

Asked about the tariff hike, he did not spell out any expectations of whether the telcos will move in after the elections, but stressed that an increase is essential.

Over the last few years, data consumption in India has shot up 82 times, voice calls are up 6 times but the ARPU has risen only by 1.2 times, he said.

He said the company's ARPU is lower than the industry because of the high proportion of 2G subscribers it services, and added that the headroom available to grow the ARPU exists because 42 per cent of its over 215 million subscribers use the services only for 2G, and can upgrade to 4G services for a better experience.

The company, which was struggling with high debt in the recent past, has repaid Rs 17,000 crore to banks and financial institutions, and the overall debt stood at Rs 4,500 crore as of February-end, he said.

The government's holding will fall to 24 per cent from the present 32 per cent, and even if one considers that the government's equity proportion goes up due to one more round of conversion of dues to equity in the near future, it will not go far beyond the current level, he said.

There is no need for buying any new spectrum right now and the portfolio is sufficient to meet the requirements, Moondra said, speaking on the upcoming round of auctions.

The company has set a price band of Rs 10-11 per equity share for the issue -- billed as the largest FPO by a private company -- that opens on Thursday and closes on next Monday.

Vi shares closed 1.54 per cent up at Rs 13.16 apiece on the BSE on Monday, as against a 1.14 per cent correction on the benchmark.

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