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Business News/ Industry / Telecom/  Vodafone in advance talks with gear vendors for 5G rollout: CEO Akshaya Moondra
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Vodafone in advance talks with gear vendors for 5G rollout: CEO Akshaya Moondra

Moondra says that the carrier was in early stages of the 5G deployment and that there was no change in the overall trends that we see in terms of the subscriber movement in different categories

The Aditya Birla Group promoted company reported an average revenue per user of  ₹135, higher by 3.3% from  ₹131 in the previous quarter. (AFP)Premium
The Aditya Birla Group promoted company reported an average revenue per user of 135, higher by 3.3% from 131 in the previous quarter. (AFP)

NEW DELHI : Vodafone Idea said it was in advanced discussions with telecom gear vendors for its 5G rollout strategy and that it will comply with minimum 5G rollout obligations, said chief executive officer Akshaya Moondra in the post results earnings call Wednesday, indicating that the No 3 carrier will launch its services in select cities soon.  

“We have live 5G clusters in Delhi and Pune where we have partnered with various OEMs to test compatibility of available 5G handsets. Further we are in advanced stages of discussion with various network vendors for finalization of the rollout strategy," he said. 

“Our effort will be that as soon as funding is inplace we will expedite our rollout to have a presence in the geographies which matter particularly in the context of 5G and so that we are able to compete as early as possible," Moondra said.  

On the 5g minimum rollout obligation, Moondra said, “I think that is not a large investment and that is something which will comply," he added.  

According to minimum rollout obligations set by the government, telcos have to launch services anywhere in the licensed service area in both metro and non-metro cities in the first year of spectrum acquisition. 5G spectrum was allocated to all carriers on 18 August, 2022.   

“5G is a part of our plan. It is clear that we will be starting a little late compared to the competition, but I believe that 5G is evolving," he said, adding that while the technology may offer better speeds, the customer experience was not very different and therefore ubiquitous coverage will be needed for a better experience.  

Moondra further stated that the carrier was in early stages of the 5G deployment and that there was no change in the overall trends that we see in terms of the subscriber movement in different categories.  

The No 3 loss-making carrier, in which the government has taken 33% equity, said that it will not defer existing bank debt which will be paid back on maturity and that new funding will be focused on investments, for which it has begun discussions with the consortium of banks since the pre-condition of government converting the interest on dues into equity had been fulfilled.   

Vodafone Idea needs to raise 20,000 crore in debt and equity from investors to plough into 5G deployments and operations in order to stay afloat in a competitive Indian telecoms market, where rivals Reliance Jio and Bharti Airtel have rapidly expanded 5G services.   

"The requirement of the banks was the government conversion. We have had significant discussions with our consortium of bankers over the past few months. With the government conversion now having happened, those discussions can progress further. We have already started engaging with them and the discussions are progressing as we speak," he said, adding that clear pending dues owed to vendors was being done on priority.   

Moondra noted that it had converted interest on AGR dues of 16,000 crore into equity of 33.1% which was now owned by the government as part of the relief package provided by the government last year. Further, the Board approved issuance of Optionally Convertible Debentures amounting to 1600 crore to its tower vendor one of its vendor American Tower Corporation India. The carrier owes dues of up to 3,000 crore to ATC and about 7,000 crore to its other vendor provider Indus Towers, with which it has entered into payment plan with softer terms. 

Moondra added that the carrier was in discussions with the government for longer payment tenure for its outstanding dues from license fees for the third quarter FY23, for which it had made a partial payment. It currently owes the government 41,300 crore in regular license fees and spectrum charges, which include regular instalments, and those arising from the deferment mooted by the government's reform package. 

"Generally on the AGR front, the final figures are to us communicated by DoT. But according to our calculations, there is 9,100 crore of original installment, and 7,400 crore in dues rising due to deferment," Moondra said. 

On spectrum charges, the company currently owes 14,000 crore of original instalment dues and 10,000 crore arising due to the deferment, he said. 

Moondra said that the industry and carrier should quickly move to a structure where consumers would have to pay more for using more, hinting at tariff hikes.  

"My personal belief is that the current structure of pricing should evolve to make people at the higher end, those who are using more (data or call), pay more. That is a direction towards which we want to move quickly," he said. 

On following rival Airtel on raising the entry level tariffs to 155 from present 99, Moondra said that company will decide on the steps it will take but for now was a was on a wait-and-watch mode.  

Vodafone Idea widened its losses to 7,988 crore for the quarter ended December 2022 compared to loss of 7,234 crore in the same quarter previous year, even as revenues increased 9.3% to 10,620 crore from 9752 crore in the same comparison period due to improvement in subscriber mix, tariff intervention and 4G subscriber additions.  

The Aditya Birla Group promoted company reported an average revenue per user of 135, higher by 3.3% from 131 in the previous quarter. ARPU is the key profitability parameter for telecom service providers. However, its ARPU is the lowest amongst peers, with Airtel leading the pack at 193 per month. 

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ABOUT THE AUTHOR
Gulveen Aulakh
Gulveen Aulakh is Senior Assistant Editor at Mint, serving dual roles covering the disinvestment landscape out of New Delhi, and the telecom & IT sectors as part of the corporate bureau. She had been tracking several government ministries for the last ten years in her previous stint at The Economic Times. An IIM Calcutta alumnus, Gulveen is fluent in French, a keen learner of new languages and avid foodie.
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Updated: 15 Feb 2023, 07:31 PM IST
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