 "Vodafone Idea")
Cash-strapped telecommunications company Vodafone Idea has allocated Rs 5,720 crore for the rollout of 5G services from the Rs 18,000 crore it expects to raise from the follow-on public offer (FPO), according to a report by The Economic Times (ET).
"But overall investment into 4G expansion and 5G rollout will be much more, given that there is a debt raising of Rs 25,000 crore to follow," a person familiar with the matter told ET.
The company's goal is to extend 5G coverage to 40 per cent of its current revenue base within the next 24-30 months. Regarding 4G, Vi plans to optimise the 900MHz and 2100MHz spectrum for improved coverage. Additionally, it will expand its 4G footprint in 17 priority circles, chief executive Akshaya Moondra said.
Moondra highlighted 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 low-value plans to unlimited data packages typically results in a nearly threefold increase in ARPU, he added.
He was addressing reporters on Monday at the opening of the company's FPO to raise Rs 18,000 crore, marking India's largest FPO by a private company.
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Moondra stated that the company is anticipating a robust group of anchor investors, which will be revealed late Tuesday. He emphasised that the government's conversion of debt into the company's equity has instilled strong investor confidence, which is expected to revitalise the company's previously sluggish funding endeavors.
With the Government of India currently holding the largest share in Vi at approximately 32 per cent, Moondra highlighted that post-equity dilution in the current round, the government's share will reduce to 24 per cent, providing a comfortable margin for the government to potentially extend a reforms package in FY26, especially as the moratorium period for spectrum payments ends.
Regarding the current FPO, half of the portion is reserved for qualified institutional buyers, 15 per cent for high-net-worth individuals, while the remaining 35 per cent is designated for retail investors.
Following the successful completion of the Rs 20,000 crore equity round, which also includes a promoter infusion of Rs 2,075 crore, Vi intends to secure debt funding of Rs 25,000 crore.
This report has been updated.
This report has been updated.
