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The beleaguered Indian telecoms operator says a return to growth will be possible following its $2.2 billion follow-on public offering (FPO)
Last week, Vodafone Idea announced that it would launch India’s largest ever FPO, seeking to raise almost $2.2 billion in an effort to reduce the company’s debt and provide funds for infrastructure investment.
Now, Vodafone Idea’s CEO Akshaya Moondra has revealed further details about the potential impact of this funding, saying that it should allow the operator to launch 5G services in selective areas over the next 6–9 months.
“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.
More specifically, Moondra indicated that roughly $700 million of the total funds raised by the FPO would be used for the deployment of 5G infrastructure. This will allow for limited initial deployments, the exact locations of which have not been revealed.
Ultimately, Vodafone Idea is aiming to deploy 5G coverage to cover 40% of the company’s customer base in the next 24–30 months, with nationwide coverage to follow at an unspecified point in future.
Moondra notes that additional funds will be required for the wider rollout, with Vodafone Idea already in discussions with several banks. Exactly how much will need to be borrowed was not revealed.
Discussions with 5G equipment vendors and relevant testing has already begun.
Vodafone Idea’s difficult financial situation, centred around the billions of dollars owed to the government in licence fees and adjusted gross revenue dues, has seen the company’s ability to compete against rivals greatly diminished in recent years. Vodafone Idea lost 4.6 million subscribers in Q3 of FY2024 alone, marking nine straight months of customer reduction that financial year.
This challenging financial situation has left the operator with no choice but to delay its 5G launch behind that of its rivals, Reliance Jio and Bharti Airtel, both of whom launched commercial 5G services at the end of last year.
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