Voda Idea in active talks for funds: MD Ravinder Takkar

MD Ravinder Takkar said the fund infusion by promoters, the government reform package, return of bank guarantees and tariff hikes are being perceived positively by the lender and investor community and the telco remains in active talks for funds.

In an earnings call with analysts Thursday, Takkar also said that 5G pricing will depend on the evolution and adoption of 5G use cases. But he does see it being priced at a premium to 4G with the caveat that it will require higher data bundling given the expected increase in data consumption over 5G.

The comments came with analysts raising concerns over the telco’s ability to protect its market share in light of reducing capex towards expanding its current 4G network. They also questioned the ability of the telco to roll out meaningful 5G services, with stronger peers

and Reliance Jio poised to roll out their networks shortly.

Takkar told analysts that the telco has made strategic spectrum buys in the recently-concluded spectrum auction, with focus on 17 priority circles. “We have bought mid-band spectrum in our 17 priority circles. The bulk of our capex will go to these priority circles in the future as well.”

He added that the quantum of mid-band spectrum acquired is enough for the telco to service the 5G user base for now. It has acquired 50 MHz of 3.3 GHz airwaves in the 17 focus circles. Its total purchase in the auction was 6228.4 MHz of spectrum worth ₹18,799 crore.

But Goldman Sachs, in a report, warned about Vi’s cash position and pointed out that it will struggle to protect market share.

“While Vodafone Idea has bought 5G spectrum in 16-17 service areas in the recent auction, we remain uncertain about the company’s ability to make meaningful 5G rollouts without increasing capex,” said analysts from Goldman Sachs.

Analysing Vi’s fiscal first quarter numbers, Japanese brokerage firm Nomura in a report said: “With Vi’s current cash EBITDA run rate (₹8,400 crore) insufficient to meaningfully increase capex, large upcoming debt repayments (around ₹7,000 crore) and also delays in external fund raise, we think Vi’s 5G rollouts would remain constrained in the near term. Impending 5G rollouts by peers could lead to accelerated market share losses for Vi”.


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