Vodafone Idea Inability to Raise Funds Could Lead to 5G Duopoly: GlobalData

The government has already done more than enough for a private firm to ensure that it doesn't close shop. From here on, Vi needs to chart its own journey and build a sustainable business for the investors who have backed it for years now. If the telco can show some improvements in business performance, it may be able to raise funds from international markets.

Highlights

  • Vodafone Idea (Vi) has not been able to raise funds through external investors, and that is impacting its ability to roll out 5G in the near future.
  • The telco's CEO has already commented that until the time they can figure out how to get the funding, they won't be able to commit to a 5G rollout timeline.
  • While Vi is taking all this time to roll out 5G, there are Airtel and Jio setting records in rolling out 5G at the fastest speed globally.

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Vodafone Idea

Vodafone Idea (Vi) has not been able to raise funds through external investors, and that is impacting its ability to roll out 5G in the near future. The telco's CEO has already commented that until the time they can figure out how to get the funding, they won't be able to commit to a 5G rollout timeline. But while Vi is taking all this time to roll out 5G, there are Airtel and Jio setting records in rolling out 5G at the fastest speed globally. This could leave Vi very much behind in the competition. GlobalData, a research firm, has said that the struggles Vi is facing in raising funds could lead to a duopoly in India's 5G market.




Earlier, Vi was saying that the delay in the dues to equity conversion from the government is stopping it from being able to raise funds. But that finally happened two months back, and until now, there has not been a single development related to fundraising.

Read More - Vodafone Idea Lost Market Share in Key Circles in 2022

Shri Charan Padala, Principal Analyst in the Thematic Intelligence at GlobalData, wrote in a report, "The Indian government may need to intervene to ensure that there is healthy competition in the telecom market and that consumers have access to high-quality, affordable services. To realise the broader benefits that the telecom sector provides to other sectors, the survival of Vodafone Idea is necessary to avoid a duopoly in the Indian 5G market."

The government has already done more than enough for a private firm to ensure that it doesn't close shop. From here on, Vi needs to chart its own journey and build a sustainable business for the investors who have backed it for years now. If the telco can show some improvements in business performance, it may be able to raise funds from international markets.

Padala also said that Vi could monetise some of its non-core assets, such as data centers and towers, to arrange funds for the 5G rollout. It would ensure that the 5G duopoly between Jio and Airtel doesn't arise.

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