Vodafone Idea, which has nearly 260 million mobile phone subscribers in India, is urgently looking for fresh funds in order to launch 5G services
Indian telecom operator Vodafone Idea’s board of directors recently approved a plan to sell INR16 billion ($194 million) worth of convertible bonds to ATC Telecom Infrastructure, according to local press reports.
The funds obtained via this program will be used by the cash-strapped telco to pay for tower rentals from the U.S.-based telecom infrastructure company, which rents some of its assets in India to Vodafone Idea.
“Funds so raised shall be used to pay amounts owed to ATC under the master lease agreements and, to the extent of any remainder, for general corporate purposes of the company,” the company said.
Vodafone Idea owes over INR 20 billion to ATC and an estimated INR 70 billion to Indus Towers, according to the reports, which cited people with knowledge of the matter.
Vodafone Idea, which has nearly 260 million mobile phone subscribers in India, is urgently looking for fresh funds in order to remain competitive in the domestic market, where competitors such as Bharti Airtel and Reliance Jio have already kicked off initial 5G offerings.
Vodafone Idea previously said that the launch of 5G services in India will depend on several factors such as the evolution of use cases, customer demand and competitive dynamics.
“We are in discussion with various vendors for 5G procurement. We are also in discussions with the banks for funding arrangements. And once these two things are in place, we will be taking action to deploy 5G,” Vodafone Idea CEO Akshay Moondra had said.
The first telco to launch 5G in India was Bharti Airtel, which has activated its 5G services in eight cities with plans to progressively cover the entire country by March 2024. Some of the cities where Airtel already offers 5G include Delhi, Mumbai, Varanasi and Bangalore.
Meanwhile, Reliance Jio Infocomm recently announced the launch of the beta trial of its 5G services in Mumbai, Delhi, Kolkata and Varanasi.
These two telcos have awarded multi-year 5G equipment agreements to European vendors Ericsson and Nokia.
The government of India said it expected over 200 Indian cities to get 5G services in the next six months. According to government officials, 5G services could be available in 80-90% of the country in the next 2 years.