Vodafone Idea Limited (Vi) has planned to allocate Rs 57.2 billion for the rollout of 5G services from the Rs 180 billion it expects to raise from the follow-on public offer (FPO). Overall, the operator will spend Rs 127.5 billion (71 per cent of total funds) for network expansion capex over the next two years.
According to Akshaya Moondra, chief executive officer (CEO), Vi, the telco will start rolling out 5G services in six-nine months after the company completes its equity funding round of over Rs 200 billion this quarter.
He added that the government is the largest shareholder of Vi holding around 32 per cent of the company. After equity dilution in the current round, its share will be reduced to 24 per cent, which is a comfortable range for the government to further extend a reforms package in the fiscal year 2025-26 when the moratorium period of spectrum payments comes to an end.
The company plans to spend over 70 per cent of its over Rs 450 billion fund raise via debt and equity into capex for 5G rollout and 4G network expansion. For 4G, Vi will invest in refarming the 900MHz and the 2100MHz spectrum for better coverage as well as expand 4G population coverage in 17 priority circles.
As per the company’s filings, Vi indicated that it intends to set-up 26K new 4G sites, expand capacity of existing 40.8K 4G sites and set up 22K new 5G sites in the next two years. According to the company, the cost for setting up a 4G site is Rs 1.45 million, of which Rs 1.3 million is towards equipment and Rs 0.15 million is towards services.
Out of the remaining portion of funds, Rs 21.7 billion will be used for clearing the first instalments for spectrum bought in 2021-22 while the rest will be utilised for general corporate purposes.
Furthermore, after successful completion of the Rs 200-billion equity round, which also includes promoter infusion of Rs 20.75 billion, Vi is planning to tie up debt funding of Rs 250 billion.
