Vodafone CEO says 5G rollout in 6 months after FPO fundraise
OUT OF THE RACE. May not participate in the next auction, expected after the elections
As debtladen telecom operator, Vodafone Idea gets ready for its followon public offer (FPO) of ₹18,000 crore, CEO Akshay Moondra expects to roll out Vi’s 5G network in the next sixnine months. However, he hinted that Vi will not be participating in the next 5G spectrum auction, which is expected after the Indian general elections.
At the FPO presser, Moondra said, “It is clear that we have sufficient spectrum at this time, and we do not need additional spectrum. We have some administered spectrum which will come up for renewal. I don’t see any significant need for buying new spectrum other than the renewal.”
Vodafone is the only carrier which does not have 5G services at the moment, whereas Jio and Airtel completed their panIndia network rollout last year. While customers have not necessarily seen significant evolution in telephony
(from left) Ravinder Takkar, Non-Executive Chairman, Vodafone Idea, Akshaya Moondra, CEO, and Sushil Agarwal, Non-Executive Director and Group CFO, Aditya Birla Group, at the press conference
after 5G was launched in India more than a year ago, the lack of 5G services is a noticeable blight on Vi’s network plans. To economise, Vi will also be bringing 5G services for 40 per cent of its subscriber base, unlike the others who claim that their 5G network has panIndia presence.
‘FPO TO SUCCEED’
Vodafone Idea also expects the FPO to see maximum subscription, as Suraj Krishnaswamy, executive director
of investment banking at Axis Capital, one of the book runners for the issue, observed, “We’ve had an extensive roadshow with all international and domestic institutional investors. We are positive that we should get good subscription from both retail and (high net worth) investors also.”
The public offer, at a price band at ₹1011, will begin on April 18 and conclude on April 22.
Both the government and the promoters will see dilution in shareholding post the FPO. While government’s shareholding will go down from 33 per cent to 24 per cent if the FPO is fully realised, promoters’ share will go down from 48.9 per cent in March 2024 to 37.338.2 per cent, according to an analysis by Bank of America.
This is set to be the largest FPO in India, and riding the wave of jubilant markets, Vi hopes to close the fundraising issue once and for all after being unsuccessful in attracting strategic and corporate investors for the last three years.
Funds raised from the FPO will have limited impact on Vi’s gargantuan debt, largely owed to the government, which is close to ₹2lakh crore.
The management was tight lipped about commitments (if they have made any) to institutional investors on the matter of spectrum and AGR dues. Moondra noted that there is enough headroom for the government to convert its debt to equity down the line and that there is still an 18month moratorium on AGR dues.