Separately, the telco is in talks with the Export-Import (EXIM) Bank of the US to raise capital for procuring 5G network equipment from American companies including Mavenir.
According to the officials cited above, Vi continues to be in discussions with the potential investors, including in the US, to raise fresh capital by issuing equity and equity-linked instruments. The telco has said that bank lending will follow soon after the equity fundraising is finalised.
Further delays in securing fresh funding could cripple Vi’s expansion plans, particularly the rollout of its 5G services, and capture market share lost to rivals who have already launched 5G networks.
ET had reported earlier that the company was holding talks with investors such as US private equity group, Apollo Global Management.
Vi chief executive Akshaya Moondra had earlier said that the discussions will close in the ongoing October-December quarter.The telco had earlier announced that it was looking to raise about Rs 20,000 crore from a mix of debt and equity but lately, the company has refrained from giving an update on its fundraising plans.In a statement to ET, the telco said the funding talks were delinked from its Open-RAN trials with US firms and the funding support discussions with the US EXIM Bank.
“Open-RAN (O-RAN) trials with the US companies are being explored with an eye on deployment in the future. Funding is completely independent, and delinked to the above,” a Vi spokesperson said.
Query sent to Mavenir remained unanswered at the time of going to press.
A second official said talks with the US EXIM Bank will help Vi as such loans can be availed at comparatively lower rates than private lenders. For instance, India’s top telco, Reliance Jio recently raised close to $2 billion (Rs 16,640 crore) in one of India’s biggest offshore loans in FY24, to help fund its recent 5G network gear purchases from Finland’s Nokia. Finnish export credit agency, Finnvera, is believed to have provided a cover of a similar sum to insure Jio’s 5G gear supplier, Nokia, and the telco’s global lenders from risks, ET has reported.
O-RAN Trials
Vi has been holding trials with Mavenir for a 5G network based on O-RAN for a few telecom circles and is in talks for equipment supply. It is the only private telco in the country that has still to commence rollout of 5G networks while stronger rivals Reliance Jio and Bharti Airtel are nearing the completion of their network rollouts.
The loss-making telco had told the Department of Telecommunications (DoT) that it would commence 5G rollout once it secures funding.
Analysts believe that with O-RAN, telcos are looking to reduce the total cost of ownership compared to the traditional RAN from vendors like Nokia and Ericsson. Under O-RAN, telcos can disaggregate hardware and software, allowing vendor interoperability and reduction of overall network costs by around a third. But some say that the technology is yet to mature, a reason why Jio and Airtel have gone with traditional network vendors such as Nokia, Ericsson and Samsung for their 5G network rollouts.
