Vodafone Idea (Vi), the third-largest telecom operator in the country, is gearing up for 5G spectrum auction. The telco is not expected to bid heavily, but it will still look at acquiring some airwaves necessary for the 5G rollout. However, before the spectrum auction, the government will complete the process of taking equity from Vi.
Vodafone Idea will be ridden of Rs 16,133 crore worth of interest dues by giving the same amount in the form of equity to the government. This process will be done in two to three weeks of time; a senior government official told Financial Express. The telecom operator will issue the shares to the government on a preference basis.
Equity Conversion Really Important for Vodafone Idea
The CEO of Vodafone Idea, Ravinder Takkar, had previously said that the telco is very close to raising Rs 20,000 crore from external investors. But that isn’t happening because the government is yet to finish the process of taking up equity in the company. Once that is done, and everything is in the clear, the external investors might pick up a stake in the company.
In addition to this, Vodafone Idea has announced that its board is going to meet on June 22, 2022, to raise funds up to Rs 500 crore via equity shares or convertible warrants on a preferential basis to one or more entities belonging to Vodafone Group UK.
Things are rolling fast in the Indian telecom sector, and Vodafone Idea desperately needs access to funds to keep up with the competition. The company has not made any money since the merger, and that has limited its capacity to invest in the network and other important infrastructure. It will be interesting to see whether Vodafone Idea can get access to funds from external investors before the spectrum auction kicks off. If the telco is able to do that, it will be a great thing for its 5G rollout plans.