Vodafone Idea (Vi) is expected to submit a revival plan within a month following the Centre's acquisition of equity in the struggling telecom company, according to India's telecom secretary, K Rajaraman. In an interview with Livemint, he said that the return of Kumar Mangalam Birla to the board of the telco is seen as a positive step, and the company is in discussions with several institutions to raise capital for its 5G rollout plans.
Vodafone Idea has a debt of Rs 2.2 trillion as of September 2022. The Centre had previously converted adjusted gross revenue (AGR) dues of the company of Rs 16,133.3 crore into equities and become its largest shareholder. Rajaraman emphasised that the only objective of this step was to ensure a sufficient number of competitors are in the market and that the telco revives.
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The Centre is preparing for the next spectrum auction in the second half of 2023-24 (FY24), which may include unsold spectrum from previous auctions and new bands. Rajaraman stated that the government has unsold spectrum in the 600 MHz band and is in the final stages of discussing candidate bands to introduce. A reference to the Telecom Regulatory Authority of India (TRAI) may be made within a month or two.
The revival of Vodafone Idea is crucial to the Indian telecoms sector, as it will help maintain a competitive environment and prevent consolidation, which could lead to higher tariffs for consumers. The company's 5G rollout plans are also significant for the sector's growth, as it will increase the speed and efficiency of data transmission, enabling new technologies such as IoT, AI, and AR/VR.
The telecoms sector has been under significant financial pressure due to high spectrum costs, AGR dues, and intense competition. The government's acquisition of equity in Vodafone Idea is a step towards stabilising the industry and providing a conducive environment for growth. The upcoming spectrum auction will provide an opportunity for telcos to acquire the necessary spectrum to offer better services to customers and compete more effectively in the market.
