Vodafone Idea (Vi) would be looking to issue debentures worth Rs 1600 crore to the American Tower Company (ATC). Earlier, Vi had issued optionally convertible debentures (OCDs) to ATC, but that didn't work out because one of the conditions of the OCDs issue was that the govt would convert dues into equity. But the Indian government has not done that yet and it will not happen as long as the promoters of the telco don't pitch in additional capital. In a recent regulatory filing, Vodafone Idea said that its board is all set to meet on January 31, 2023 to discuss preferential issue of OCDs to ATC.
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Vodafone Idea is in a desperate situation as the telco doesn't have enough funds to keep going on for long. It needs the OCDs issue to go through as well as the govt to convert the dues. The promoters of the telco are ready to infuse more capital, but that needs to be a significant amount otherwise the government would not go ahead and do its part to get equity in the company.
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Vi is currently trying to enhance customer experience by delivering them faster internet speeds with 4G network. But that's not going to be enough when the other telcos are offering 5G speeds at the cost of 4G. For Vi, there are no solid plans to launch 5G yet. The telco would only be able to give commercial orders for 5G equipment once it can arrange funding. But to get funding, the promoters need to move first and then the govt must convert dues into equity. In its current situation, it is going to be very hard for Vi to sustain for long.