NEW DELHI: Even as people were ready to write the epitaph of Vodafone Idea (Vi) in the absence of funding, the country’s third-largest telecom company has managed to tie up with banks for funds. A senior official of the Department of Telecommunication (DoT) told this newspaper that Vi is likely to complete fundraising in June 2023, and also launch its 5G services during the month.
The official said the discussion to raise funds is in the final stage and it may complete somewhere in June 2023. “I think Vodafone Idea’s discussion with the banks to raise funds is positive. The telecom service provider will announce its fundraising next month.
As the company has maintained that it would start deploying a 5G network once funding is in place, I am expecting the company to start deploying 5G in June itself,” said the official. The official also said the company has cleared the licence fee for the third quarter and also made part payment for the fourth quarter. The debt-laden telecom service provider has been trying to raise funds from the market for more than two years but failed to get any.
The question sent to the company about its funding remained unanswered by the time of the press. The promoters of Vi had invested Rs 4,900 crores in the company last year. The company in the past has attributed its inability to invest in the 5G rollout to delay by the government in converting interest dues into equity.
In February 2023, the government agreed to convert `16,133 crore interest dues related to deferred adjusted gross revenue (AGR) and spectrum usage charge (SUC) payments into equity. Since then the company has been in discussions with the banks to raise funds and invest in its network.
Recently, telecom secretary K Rajaraman reportedly said the telco is expected to unveil a revival plan within a month. Rajaramanalso said the return of Aditya Birla group Chairman Kumar Mangalam Birla to the board of the telecom service provider is a positive step for the company.
While Reliance Jio and Bharti Airtel have been deploying 5G in the country since last October, Vi is yet to reveal its 5G plans. In February 2023, Vi CEO Akshaya Moondra maintained that though the company is in talks with vendors for 5G rollout plans, there would be no 5G until funding is in place.
According to media reports, Finland’s Nokia is in initial talks with Vi on 5G equipment supplies. “The government wants Vodafone Idea to survive in the country or it will lead to duopoly in the telecom market, which is not good for the consumer,” said the official.
On a roll
Company has cleared licence fee of third quarter, says the official
Vodafone Idea promoters invested an amount of Rs 4,900 crore last year
Debt-laden telco has been trying to raise funds for more than 2 years but failed
VIL attributed its inability to invest in 5G rollout to delay by the government in converting interest dues into equity
Company likely to launch its 5G network after raising fund in June
In Feb, govt had agreed to convert `16,133 cr interest dues into equity