Mumbai: Cash-strapped telco Vodafone Idea has allocated Rs 5,720 crore towards 5G rollout from the Rs18,000 crore it expects to raise from the follow on public offer.
“But overall investment into 4G expansion and 5G rollout will be much more, given that there is a debt raising of Rs25,000 crore to follow,” said a person familiar with the matter.
The telco aims to bring 40% of its existing revenue base under 5G coverage within the next 24-30 months. For 4G, Vi will invest in refarming the 900MHz and the 2100MHz spectrum for better coverage as well as expand 4G population coverage in 17 priority circles, chief executive Akshaya Moondra said at a news briefing.
Nearly 42% of our subscriber base is still on 2G which is causing an overhang on ARPU (average revenue per user) growth, said Moondra. He said the operator aims to upgrade this population to 4G since the conversion from low-value packs towards unlimited data plans causes an ARPU improvement of nearly three times.
He was addressing reporters on Monday at the opening of the company’s follow-on public offer (FPO) to raise Rs 18,000 crore, which is India’s largest FPO by a private company.
Moondra said that the company is looking at a strong line-up of anchor investors who will be unveiled late Tuesday. The government’s conversion of debt into company’s equity has brought strong investor confidence which shall bring a turnaround to the company’s much laggard funding initiatives, he said.
The Government of India is the largest shareholder of Vi holding around 32% of the company. Post the equity dilution in the current round, its share will be reduced to 24% which is a comfortable range for the government to further extend a reforms package in FY26 when the moratorium period of spectrum payments comes to an end, Moondra said.
As for the current FPO, half of the portion is reserved for qualified institutional buyers, 15% for high net-worth individuals while the remaining 35% is the retail portion.
Post the successful completion of the Rs 20,000 crore equity round, which also includes promoter infusion of Rs 2,075 crore, Vi is planning to tie up debt funding of Rs 25,000 crore.