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Vi 5G launch to depend on use case, customers demand, competitive dynamics

The promoters of the company have invested Rs 4,940 crore and the company is in active discussion with investors for fund raise.

August 29, 2022 / 10:50 PM IST
Vodafone Idea

Vodafone Idea

Debt-ridden telecom operator Vodafone Idea's 5G services launch will depend on several factors such as use cases, customer demand, competitive dynamics etc., a senior official of the company said on Monday.

While speaking at the 27th annual general meeting, Vi Managing Director and CEO Ravinder Takker said that the promoters of the company have invested Rs 4,940 crore and the company is in active discussion with investors for fund raise.

VIL acquired spectrum worth Rs 18,800 crore, which includes radiowaves in the mid-band (3,300 MHz band) in 17 priority circles and spectrum in the 26 GHz band in 16 circles for 5G services. The company also acquired additional 4G spectrum in three circles of Andhra Pradesh, Karnataka and Punjab. The fresh spectrum bid adds an annual installment liability of Rs 1,680 crore on the company.

"5G roll-out will depend on various factors such as how use cases will evolve, demand from customers, capacity requirement as well as competitive dynamics," Takkar said. Vi has proposed to appoint the company's chief financial officer Akshaya Moondra its CEO and Takker as non-executive director.

The proposal was placed in the AGM (Annual General Meeting). Takker said that the company has now acquired spectrum in all the frequency bands and further strengthened its 4G spectrum holding with acquisition of additional radiowaves in Andhra Pradesh, Karnataka and Punjab.

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Takker said that telecom operators have raised tariff in the past, which has improved margin but the current mobile services rates are still not sustainable and need to be raised further. VIL has posted marginal narrowing of its consolidated loss at Rs 7,296.7 crore for the June quarter compared to the year-ago period, as tariff hikes boosted its realisations. The telco's loss stood at Rs 7,319.1 crore in the year-ago quarter.

VIL's revenue from operations grew to about Rs 10,410 crore in the quarter ended June 30, 2022, improving nearly 14 per cent from the year-ago period. Its Average Revenue Per User or ARPU -- a key monitorable for telecom players -- stood at Rs 128 per subscriber for the quarter, compared to Rs 104 in Q1 FY22. This represented an improvement of 23.4 per cent year-on-year, helped by tariff hikes.

At the end of the April-June 2022 quarter, VIL's total gross debt (excluding lease liabilities and including interest accrued but not due) stood at Rs 1,99,080 crore, comprising deferred spectrum payment obligations of Rs 1,16,600 crore, AGR liabilities of Rs 67,270 crore that are due to the government, and debt from banks and financial institutions of Rs 15,200 crore. The Department of Telecom (DoT) has returned a bank guarantee worth Rs 17,000 crore.
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PTI
first published: Aug 29, 2022 10:50 pm
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