Vodafone Idea (Vi) has not been able to fulfil the network rollout obligations set by the Department of Telecommunications (DoT). As per the obligations, telcos who bid for 5G spectrum in the 2022 auctions have to roll out commercial 5G services in each of the three metros within one year from the date of spectrum allotment. Further, the telcos also have to ensure that they are reaching at least one city or town in each of the 22 telecom circles with 5G within one year. While Airtel and Jio have already deployed 5G in many parts of the country, Vodafone Idea (Vi) is yet to make a difference in this area.
What Will Happen if Vodafone Idea Doesn't Comply with the Rollout Obligations
If Vodafone Idea is unable to fulfil the network rollout obligations set by the Indian government, then the telco might have to pay a penalty fee, reports ET Telecom. The report from the publication adds that if there is a delay of service launch of more than 52 weeks, then the spectrum can even be taken back from the telco.
To recall, Vodafone Idea acquired spectrum worth Rs 18,799 crore in the 2022 spectrum auctions. Vi got airwaves in the 3300 MHz and 26 GHz bands. The cash-strapped telco has not made any commercial deals with network gear vendors such as Nokia and Ericsson for 5G equipment. Vi's CEO, Akshaya Moondra, had said that until the time the telco can arrange funding, its 5G rollout timeline couldn't be determined.
Vodafone Idea (Vi) has already demonstrated the power of its 5G networks during the trial phase by partnering with Nokia, Ericsson and Samsung. The telco just needs funding to ensure that it can move ahead with its plans. Vi is in a tough situation right now because until the time promoters don't put up a significant amount of capital into the company, the government won't move ahead with the equity conversion. If the equity conversion doesn't happen, the external investors are not going to invest their money in the telco.