Vodafone Idea’s chairman Ravinder Takkar, in turn, has reiterated that the telco remains committed to ramping up 4G coverage and launching 5G. “The company will continue to make investments for expanding 4G coverage and capacity, especially in its 17 priority circles and introduce 5G services once funding is in place,” Takkar said in Vi’s latest annual report.
The telecom JV between UK’s Vodafone Plc and India’s Aditya Birla Group added that it continues to actively engage with lenders and investors for further fundraising.
In its latest annual report, Vi said it’s working towards rolling out 5G services for consumers, and that this would see an acceleration on consummation of the fundraising. “..your company has made select 5G clusters in Delhi and Pune where it had partnered with various OEMs to test the compatibility of available 5G handsets.”
Vi’s financially-stronger rivals, Bharti Airtel and Reliance Jio already have a headstart on the 5G front. Airtel and Jio have been rapidly expanding their 5G coverage since last October with both now looking to launch the next-gen services nationally by December 2023.
By contrast, Vi is yet to announce its 5G launch timeline due to its delayed external fundraise. The loss-making telco’s efforts to raise around Rs 20,000 crore via a mix of debt and equity have been unsuccessful for well over a year now.Vi requires a fresh capital infusion from its promoters as that is expected to lead to third-party equity funding. Such a scenario would also trigger the much-needed investments in Vi’s 4G network and towards its pending 5G rollout. But that hasn’t happened yet, which has resulted in lenders delaying refinancing of part of its existing bank debt. Vi ended the march quarter, FY23, with Rs 2.09 lakh crore net debt and a modest cash balance of Rs 230 crore.The company’s promoters have been widely expected to infuse around Rs 5,000 crore of fresh capital in tranches after the government converted the telco’s accrued interest towards AGR arrears into equity in February this year and became its biggest shareholder with a 33.1% stake.
In its annual report, Vi’s chairman Takkar also said that telecom tariffs continued to remain unsustainable and needed to increase significantly from current levels to improve overall industry health and generate reasonable returns for operators to promote investments, including investments towards new and emerging technologies.
At Airtel’s fourth quarter earnings call, the company’s managing director Gopal Vittal too had reiterated that tariffs needed to go up quickly as the current 8.5% RoCE (return on capital employed) remained way too low.
