Vodafone
Group Plc’s India unit seems set to be back in the reckoning. The company said that its board has approved raising up to Rs 20,000 crore in equity from promoters and other investors by June. Vodafone Idea informed the same in an stock exchange filing on Tuesday, February 27. Additionally, Vodafone Idea Ltd, a joint venture between Vodafone and Kumar Mangalam Birla, aims to raise 250 billion rupees in debt.
The announcement comes as the company seeks to turn around its fortunes in India's telecom market dominated by
Airtel
and
Reliance Jio
. According to reports, the company founder entities will also participate in the equity fund raise which will be used to invest in expanding 4G coverage, rolling out a 5G network and capacity expansion.
Vodafone-Idea
is India's third largest telecom carrier by number of subscribers.
Battle for survival
Vodafone Idea has been fighting a desperate battle for survival. As of 2023-end, Vodafone Idea's total debt pile stood at 2.15 trillion rupees. This includes deferred spectrum payment obligations it owes to the government. The company is reporting quarterly losses, and has been losing subscribers to Airtel and Reliance Jio month after month. Airtel and Reliance Jio's average revenue per user (ARPU), a key performance metric for telecom companies, stood at Rs 208 and Rs 181.7 respectively in the December quarter, for Vodafone Idea the same is Rs 145.
Vodafone's 5G timeline
The fund raising is expected to wrap up in the coming quarter. Vodafone Idea is expected to use the funds to roll out its 5G services and expand 4G service. During the last earnings call, CEO Akshay Moondra said that the company plans to rollout 5G services within six to seven months after it raises funds. Rivals Bharti Airtel and Reliance Jio have already launched 5G services in most parts of the country.
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