Vodafone Idea intends to invest Rs. 50–55K crore over three years

On the strength of a recent stock fundraising and planned bank financing, Vodafone Idea CEO Akshaya Moondra said on Friday that the firm is expecting to spend between Rs 50,000 and Rs 55,000 crore on capital projects over the course of the next three years.

The firm plans to use the capital expenditures for a number of purposes, including strengthening its enterprise business, launching 5G in strategic regions, and extending 4G service in 17 priority circles.

This becomes significant since Vodafone Idea’s capital expenditures were around Rs 1800 crore in FY24; after the fundraising, those amounts would grow tenfold to approximately Rs 18,000 crore each year over the next three years.

In the post-quarter results call with investors, Moondra said, “Our top priority is 4G coverage because that was the only reason we continue to lose subscribers. For expanding that, the capex will be fairly accelerated.”

Due of capacity concerns, there are some places that are decongested. Moondra said that in order for the business to remain competitive in the market, the majority of the coverage should be finished in a time frame of 12 to 15 months. “The remaining investment will happen as the capacity as the traffic grows,” Moondra continued.

In addition to 4G coverage, Vodafone Idea plans to roll out 5G extensively in the next six months. The corporation is aiming to finish the minimum network deployment requirements in Bihar and Mumbai, having so far fulfilled them in four circles: Maharashtra, Delhi, Tamil Nadu, and Punjab.

“We are working with a number of technological partners to finalize our preparations for the introduction of 5G.Major cities with high densities of 5G devices will be the primary target, according to Moondra.The fact that we will be launching 5G now means that we will be in a good position to make the most of our capital expenditures since we can use 5G rather than 4G to handle some of the capacity requirements, he said.Vodafone Idea has resumed talks with a group of banks for debt financing of about Rs 25,000 crore and further non-fund-based facilities of up to Rs 10,000 crore, after the fundraising of Rs 18,000 crore via a follow-on public offer (FPO) and Rs 2,075 crore from founders.”We will be able to wrap up the talks with the banks in good time since we have some funds available. Those amenities will be available when we need them, according to Moondra.

“What we believe based on our outlook today is that in FY26 and FY27, we will probably be looking at the conversion of the instalments, which are as per the reforms package convertible,” Moondra said when questioned about the payments to the government after the suspension.

When the regulatory dues moratorium expires in FY26, Vodafone Idea would owe the government around Rs 29,000 crore. The corporation would be required to pay the government Rs 43,000 crore till FY31 starting in FY27.

Vodafone Idea’s gross debt (lease obligations excluded and interest accrued but not payable) was 2.16 trillion at the end of the January–March quarter. The total amount of debt includes Rs 1.3 trillion in postponed spectrum payment commitments, Rs 70,320 crore in government-owed AGR liabilities, Rs 4,212 crore in debt from banks and financial institutions, and Rs 160 crore in optionally convertible debentures.

about the tariff increases, Moondra restated his position about usage-based fees. “In order to guarantee that the operators receive a fair return on their substantial investments in spectrum and networks, tariff rationalization of the high usage plans and a shift to a pricing structure of paying more for using more remain essential,” said Moondra.

According to him, there has been a gradual decline in the degree of SIM consolidation, based on the trend in pricing rises. Moondra says that although tariff increases are tolerable, the emphasis now has to be on “paying more for using more” as opposed to entry-level packs.

The net loss for Vodafone Idea for the January-March quarter increased from Rs 6,986 crore to Rs 7,674 crore. Due to a decline in sales and the base impact from the previous quarter, when the business reported a one-time gain of Rs 755.5 crore, the losses increased.

Operating revenue for the period decreased by 0.6% on a quarterly basis to Rs 10,607 crore. The revenue increased by 0.7% over the previous year.

By the end of March, the company’s user base had dropped to 212.6 million from 2.6 million mobile members.

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