Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.
September 29, 2022
India's third-largest service provider, Vodafone Idea, has yet to close 5G vendor deals because of its massive debt, according to media reports.
While Bharti Airtel and Reliance Jio have already announced 5G deals and plan to launch commercial services before Diwali (the festival of light) on October 24, Vodafone Idea has yet to make any such announcement.
Figure 1: Vodafone Idea's massive debt may result in a delayed 5G launch.
(Source: Amlan Mathur/Alamy Stock Photo)
Reliance Jio and Bharti Airtel say 5G will be available across the country in another 18 to 24 months.
Vendors are reluctant to sign new deals with Vodafone Idea because dues for 4G equipment are still pending.
It's been reported that the service provider owes 30 billion Indian rupees (US$368.48 million) to Nokia, INR10 billion ($122.8 million) to Ericsson, INR70 billion ($0.85 billion) to Indus Towers and INR20 billion ($245.6 million) to American Tower Company (ATC).
This puts Vodafone Idea in a vulnerable position, and it risks losing premium subscribers.
Want to know more? Sign up to get our dedicated newsletters direct to your inbox.
The company is already witnessing an erosion of its subscriber base – down from 271.9 million in July 2021 to 255.1 million in July 2022.
Vodafone Idea spent INR187.99 billion ($2.3 billion) to procure 6,228MHz of spectrum across the 1800MHz, 2100MHz, 2500MHz, 3300MHz and 26GHz frequency bands in a few priority circles (service areas).
The operator's chief executive officer, Akshay Mundra, recently said the company would finalize 5G launch plans when it procures bank loans. Vodafone Idea has been trying to procure investment for several years but hasn't been successful.
Media reports say the Ministry of Finance has cleared the proposal to convert part of the adjusted gross revenue (AGR) owed to the government into equity, making them a majority stakeholder with a 33% stake in the company. This is likely to make investors wary.
— Gagandeep Kaur, contributing editor, special to Light Reading
Read more about:Asia
With more than a decade of experience, Gagandeep Kaur Sodhi has worked for the most prominent Indian communications industry publications including Dataquest, Business Standard, The Times of India, and Voice&Data, as well as for Light Reading. Delhi-based Kaur, who has knowledge of and covers a broad range of telecom industry developments, regularly interacts with the senior management of companies in India's telecom sector and has been directly responsible for delegate and speaker acquisition for prominent events such as Mobile Broadband Summit, 4G World India, and Next Generation Packet Transport Network.
You May Also Like
Rethinking AIOPs — It's All About the DataMar 12, 2024
SCTE® LiveLearning for Professionals Webinar™ Series: Fiddling with Fixed WirelessMar 21, 2024
SCTE® LiveLearning for Professionals Webinar™ Series: Cable and 5G: The Odd Couple?Apr 18, 2024
SCTE® LiveLearning for Professionals Webinar™ Series: Delivering the DAA DifferenceMay 16, 2024