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Vodafone Idea in talks with vendors for 5G rollout

By Subhayan Chakraborty
February 16, 2023 11:20 IST
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Vodafone Idea (Vi) is in continuous talks with network vendors to finalise its 5G rollout plans, Vodafone Idea CEO Akshaya Moondra said.


Photograph: Anushree Fadnavis/Reuters

"We are in early stages of 5G deployment.

"5G is an important development and we are keeping our eyes on it," Moondra said on Wednesday in a post-result analyst call.

Already five months behind rivals Jio and Airtel in the 5G race, Vi's efforts will be on the deployment of 5G in target geographies.


This will be done as soon as funding is secured, Moondra said.

The company is also set to comply with the government's 5G minimum rollout obligations.

However, the CEO said while 5G offers much better speed, the speed differential is not a huge factor from a consumer perspective.

Vi is now focussed on investments across business segments, plans for which had been stalled by a lack of liquidity earlier.

As a result, any new debt undertaken by the company through loans from banks will be focussed on investments, Moondra said.

He stressed any existing debt will not be deferred and will be paid until maturity.

On the firm's fundraising exercise, he said Vi is in talks with banks, but did not give details.

"The requirement of the banks was the government conversion.

"We have had significant discussions with our consortium of bankers over the past few months.

"With the government conversion now having happened, those discussions can progress further, as we speak," Moondra said.

Vi's net loss widened by 10.5 per cent year-on-year (YoY), to Rs 7,990 crore in Q3FY23 due to increase in operating expenses and finance costs.

Dues and tariffs

The firm currently owes the government Rs 41,300 crore in regular license fees and spectrum charges.

These include regular instalments, and those arising from the deferment mooted by the government's reform package.

"Generally on the AGR front, the final figures are to us communicated by DoT.

"But according to our calculations, there is Rs 9,100 crore of original installment, and Rs 7,400 crore in dues rising due to deferment," Moondra said.

On spectrum charges, the company currently owes Rs 14,000 crore of original instalment dues and Rs 10,000 crore arising due to the deferment, he said.

Moondra also hinted at further tariff hikes. In the first round of hikes in two circles - Odisha and Haryana - Moondra said the company has seen a positive trend of subscriber growth.

He reiterated his calls for a tariff hike.

"My personal belief is that the current structure of pricing should evolve to make people at the higher end, those who are using more (data or call), pay more.

"That is a direction towards which we want to move quickly," he said.

Eyes on 4G & ARPU

While the overall number of subscribers has continued to reduce, the company has seen the number of 4G subscribers increase for the past six consecutive quarters.

It stood at 121.6 million at the end of Q4.

Moondra said the focus remains on converting existing 3G sites to 4G. Vi has closed three thousand 3G sites and opened two thousand 4G sites during the latest quarter, he added.

He also stressed on the company's Average Revenue Per User growth for six consecutive quarters. Vi's ARPU has risen to Rs 135 in Q3.

Moondra said the connectivity provided by the company remains the best in India, according to third party assessments.

After a long wait, the financially streched telecom service provider managed to secure a lifeline on February 3, when the Centre finally approved the conversion of the telco’s dues linked to interest on spectrum and adjusted gross revenue (AGR) worth Rs 16,133 crore into equity.

On February 7, Vi issued 16,130 million equity shares to the Department of Investment and Public Asset Management (DIPAM) under the finance ministry, giving it a 33.4 per cent stake in the company.

The development came nearly 13 months after the Vi board cleared the interest conversion.

With this, the government will have a 33 per cent stake, making it the biggest shareholder in the financially-stressed telecom joint venture between UK’s Vodafone and Kumar Mangalam Birla-owned Aditya Birla Group.

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Subhayan Chakraborty in New Delhi
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