Voda-idea to spend `12,750 cr to expand 4G, set up 5G sites

VODAFONE IDEA Ltd, which is planning to launch a Rs 18,000 crore follow-on public (FPO) issue this week, proposes to use Rs 12,750 crore for expanding its network infrastructure by setting up new 4G sites, expanding the capacity of existing 4G sites and setting up new 5G sites.

The FPO will open from April 18-22 at a price band of Rs 10-11 per share. The company will spend Rs 5,720 crore of the Rs 12,750 crore earmarked for network expansion on setting up its 5G network. In FY25, Vodafone plans to set up 10,000 new 5G sites with an investment of Rs 2,600 crore. In FY26, it will set up 12,000 5G sites with an investment of Rs 3,120 crore. Vodafone shares closed 1.54 per cent higher at Rs 13.16 on the BSE on Monday.

After the successful completion of the Rs 20,000 crore equity round, which also includes a promoter infusion of Rs 2,075 crore, the company plans to secure debt funding of Rs 25,000 crore.

Vodafone chief executive officer

The company will spend Rs 5,720 crore of the Rs 12,750 crore earmarked for network expansion on setting up its 5G network

Akshaya Moondra said that about 42 per cent of the subscriber base still uses 2G services, which has been a hindrance to Average Revenue Per User (ARPU) growth. The company intends to migrate these users to 4G, as the shift from lowvalue plans to unlimited data packages typically results in a nearly threefold increase in ARPU, he said.

While the Government of India currently holds the largest share in Vodafone Idea at around 32 per cent, post-equity dilution in the current round, the government’s share will reduce to 24 per cent. It will provide a comfortable margin for the government to potentially extend a reforms package in FY26, especially as the moratorium period for spectrum payments ends.