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Vodafone Idea Again Talks About 5G, But Still no Funding in Sight

2024-02-04 13:57:00| Source:Telecomtalk

Vodafone Idea (Vi), the third-largest telecom operator in India, has again talked about launching 5G. However, there's still no funding in sight for the operator. At the recent investors call for Q3 FY24, the CEO of Vi, Akshaya Moondra, said that they are "looking" to launch 5G in about 6 to 7 months. 

However, the telco still hasn't made any progress in raising funds. 5G deployment is extremely capital intensive, and with the kind of financial performance that Vi has posted lately, it will be impossible for the telco to compete with Jio and Airtel in the 5G segment. But Vi has a different take on this.

Vi believes it will better understand how to monetise 5G by the time it launches the next-gen mobile network. The telecom service provider is already looking to switch off 3G completely and utilise the 2100 MHz band PAN-India for 4G services. In many states, Vi has already refarmed the spectrum band from 3G to be used for 4G. The telco had earlier said that they hope to raise funds before the end of the Dec 2023 quarter. However, that didn't materialise and Vi's promoters also do not look too keen to pump moneythe company.

Sunil Bharti Mittal, Chairman of Bharti Enterprises said recently that whoever invests in Vi will have to sit for some time patiently before they can hope to see any positive returns. The telco, with more than 200 million wireless subscribers, has been losing market share in the wireless segment to the competition (Jio and Airtel).

With Jio and Airtel offering unlimited 5G data offer to customers, paying money for expensive recharges becomes a better deal with Airtel or Jio than Vi for many customers as they don't have to worry about data limits any more with 5G.

Without fundraising, Vi will not be able to deploy 5G at scale. The telco has many short-term liabilities to pay off and then from FY26 onwards, there will be payments that will go towards the deferred spectrum and AGR (adjusted gross revenue) dues.