Vodafone Idea (Vi) is making strategic plans to allocate Rs 5,720 crore towards the deployment of a 5G wireless network within the upcoming two years. The Chief Executive Officer (CEO), Akshaya Moondra, unveiled the intention to utilize funds raised through a significant Rs 18,000 crore follow-on public offer (FPO), the most substantial such offer in the nation to date, for purposes such as improving its telecom infrastructure and resolving deferred payments to the government. Moondra emphasized that an amount of Rs 12,750 crore will be dedicated to acquiring equipment for network infrastructure expansion, which comprises activities like establishing new 4G sites, enhancing or augmenting capacity at existing 4G sites, and installing new 5G sites to enable progress in this technology.
Vi, before the national launch of 5G services in October 2022, shared projections related to investments aiming to offer 5G services across the nation. Market leader Reliance Jio expressed intentions to cumulatively invest Rs 2 trillion, having already accumulated a significant 90 million 5G subscribers who contribute substantially to Jio's mobility data traffic. Airtel, another key player in the market supported by Sunil Bharti Mittal, disclosed plans for an additional 5G capex amounting to Rs 28,500 crore in the fiscal year 2024 and claimed to have 75 million 5G users by March of this year.
The company's strategy includes utilizing the funds from the fresh equity shares to settle various deferred payments, including those for spectrum to the telecom department and tax obligations totaling Rs 2,175 crore, while the remainder will target general corporate objectives. Moondra confirmed that Vi's current 5G spectrum provisions are adequate to meet its demands and proceeded to mention ongoing engagements with vendors on 5G developments. The executive also noted an optimistic shift in investor confidence following the government's decision to become the largest shareholder by acquiring a 32% stake in the company in February last year. Additionally, Vi intends to secure Rs 25,000 crore in debt from lenders subsequent to the FPO.