Vodafone Idea to begin 5G services in six months: CEO Akshaya Moondra | Mint – Mint

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Vodafone Idea is in advanced discussions with its vendors as it expects to begin offering 5G services within the next six months, chief executive Akshaya Moondra said, adding that the third largest telecom company had completed minimum rollout obligations as mandated by the government, in four circles.

While it intends to cover 40% of its revenue base with 5G services in the next 24-30 months, its top priority will be arresting its declining subscribers numbers by raising its 4G coverage to match rivals.

“We expect to start rolling out 5G six months from now. The main focus will be on main cities or areas where there is a large concentration of 5G devices. 5G investments will be a bit iterative in terms of timing, we will make investments as the market evolves,” he said.

“We will be able to effectively utilise the capex by launching 5G now. We have have applied for the Bihar and Mumbai circles, and are in talks with tech partners for 5G. We are also in advanced stages of trials for OrAN and VRAN,” Moondra said in the earnings call.

The telco has been in discussions with companies including Nokia and Ericsson for 5G gear. It had done a pilot with open RAN provider Mavenir, which is likely to lead to a commercial deal in the coming months.

The capex spends, of about 55,000 crore over three years, will mostly be used for setting up 5G in 17 priority circles, and for improving 4G coverage across the country. The top executive said capacity upgrade to address decongestion will be done over the next few months, while coverage required to be competitive will be taken care of during the coming 12-15 months.

“The capex will be spent on—expansion of 4G coverage by rolling out more sites, capacity growth in 4G where sites have been deployed already. The third will be 5G where rollout must be started afresh and then there will be enterprise. Our topmost priority is expanding 4G coverage which is the only reason why we continue to lose customers, that capex will be fairly accelerated. The rest will happen as traffic grows,” he added.

Moondra noted that the market can ‘definitely’ absorb another tariff hike, while reiterating the need for users to pay more for using more data. “The price increase may not be high on the entry level, but it had to focus more on paying more on using more,” he said.

The chief executive’s comments followed those of Airtel’s top boss Gopal Vittal who said earlier in the week that tariffs in India were ‘abysmally low’ and ‘substantial repair’ was needed for telecom companies to have a reasonable return on capital employed.

On Thursday, Vodafone Idea saw its losses widening to 7,666 crore for the quarter ended March 2024, from 6,424 crore the year before. Average revenue per user (Arpu), a key metric of profitability, improved to 146, up 7.6% on-year primarily aided by change in entry level plan and subscriber upgrades.

The No. 3 carrier by subscribers which raised 18,000 crore last month through India’s largest FPO, said that it was in talks with lenders to secure debt funding of 35,000 crore which will be used for expanding its networks. About 25,000 crore will come from banks. “Internal cash generation would be used for clearing vendor liabilities and debt,” he noted.

He added that the company was currently looking at conversion of the upcoming government liability from installments from spectrum purchases, due in FY26 and FY27, into equity, as part of the relief package offered by the government.   

The company added that the company was in talks with lenders, vendors and the telecom department, to which it owes a majority of its debt, for entering into payment plans for paying dues or for getting waivers.

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