5G services may come with a premium: Vodafone Idea CEO Ravinder Takkar

Mobile consumers may have to pay a premium for 5G services but could get higher-data packs, Vodafone Idea (Vi) Managing Director and Chief Executive Officer Ravinder Takkar indicated on Thursday.

“A fair amount has been spent on spectrum. We believe the 5G services should be hopefully priced at a premium to 4G services,” Takkar said in response to an analyst query in the post-results conference call.

However, customers could get a higher data bundle along with pricier plans.

Takkar said there was an opportunity to increase mobile tariffs by December-end with the market fully absorbing the 20 per cent hike carried out last November.

“We are impatient and we want to increase prices. Anytime we increase prices it takes several months by the time price increase settles in. We have reached that point,” he stated.

Vi, which posted a net loss of Rs 7,296 crore in first quarter FY23, acquired 6,228 MHz in five bands in the recently concluded auction. Its purchase, worth Rs 18,799 crore, is the least among the three mobile service providers.

Takkar defended the company’s spectrum purchase strategy and added that not acquiring spectrum in 700 MHz would not affect its plans. He said the company had purchased adequate spectrum and would cater to capacity requirements for several years.

Vi purchased spectrum in the 3300 MHz band in 17 of its priority circles and in the 26 GHz band in 16 circles, enabling last-mile connectivity. Additionally, it bought 4G spectrum in three circles.

“We don’t see any issue or challenge with providing enough capacity for several years. I don’t see that 700 MHz spectrum provides any additional capacity from a 5G perspective or provides any competitive advantage,” he stated.

Chief Financial Officer Akshaya Moondra said the company was in advanced discussions with banks for fresh funding for investment.

“If we look at our external debt and earning before interest, tax, depreciation, and amortisation, we are in a fairly comfortable position. There is a long moratorium for serving government debt. Banks understand this. We should be able to conclude discussions in the near future.”

Betting on a new deal

• Vi CEO defends 5G spectrum purchase, says acquisition adequate for several years
• Customers could get a higher data bundle, along with the pricier plans
• Tariff hike of last November absorbed; Vi looking for opportunity to hike rates again
• In advanced discussions with banks to raise funds for investments