Vodafone Idea, which is struggling to stave off bankruptcy after a Supreme Court bench heaped billions of dollars of extra liability on the company last year, indicated that it was not planning to sit out the 5G game.
The company is currently racing to tie up funds to keep its business afloat as it lost another Rs 4,532 cr during the three months of Oct-Dec.
Unless it finds new financial backers, not only will it be unable to buy the spectrum required for 5G services, but is likely to find it difficult to continue its existing operations.
The company is likely to need around $10 billion or so to meet its operational requirements and also bid for 5G spectrum, and is currently in the middle of efforts to raise about Rs 25,000 cr ($3.5 bln).
Discussing the company’s third-quarter results, CEO Ravinder Takkar said his team is in ‘advanced stages’ of talks to raise money from investors.
“There will not be any inordinate delay,” he reassured investors. “We are very well engaged. There is interest among various participants.. We are very well progressed… we are close,” he said, but refused to put a time-line on the fund raising activities. “This is something that will happen when it will happen,” he added.
Takkar admitted that the funds raised from investors are required for the company’s capital expenditure and network expansion, but also maintained that its current “network roll-out targets” have not been modified.
At the same time, if the choice is between expanding the company’s 4G footprint and ensuring quality levels, a greater priority will be given to maintaining a good experience for existing customers.
The company has identified certain priority circles, including Maharashtra, Mumbai, Kerala and Haryana, where it has traditionally enjoyed a hegemonic position, and is unwilling to cede any more territory in these areas. In such areas, the focus will be on ensuring customer experience, rather than on bring new areas under 4G signals.
“We’ve added a significant amount of [4G] capacity in those circles and we continue to enjoy a good experience for our customers in those circles. However, as of today, our focus is on maintaining capacity and providing a great experience. The increase in coverage in those circles will come alongside with the funding that will come,” Takkar said.
In line with comments from rivals like Bharti Airtel and Reliance Jio, Vodafone Idea too seemed to be resigned to he fact that it is may not be able to put off launching 5G services much longer.
After remaining lukewarm about the prospects of 5G in India for years, rival Bharti Airtel had last month indicated a shift in its stance and announced that it will launch 5G when the spectrum becomes available.
In what is probably his first comments on the launch of 5G, Takkar too said Vodafone Idea is “fully ready” to roll out 5G “as and when the 5G eco-system is ready”. At the same time, he maintained that the 5G eco-system is ‘nascent’ at present.
“We are well prepared for 5G roll-out as and when the eco-system is ready,” he said, claiming that Vodafone Idea has one of the most 5G-ready networks in India.
Indeed, the company — and which overhauled and re-engineered its network in 2019-20 after the merger of Idea Cellular and Vodafone — has been the most aggressive in its use of 5G-era enhancements in its 4G network, including Massive MIMO, dynamic spectrum refarming and moving its core network to a cloud-based architecture.
Because of all this, Takkar said, his company has the most “well-tested” and “tuned” network as far as 5G-era technologies are concerned.
“When the time is right for 5G, we expect to be in the best position to take advantage of that,” he promised.
Last month, rival Bharti Airtel had claimed that it had become the first telecom operator in India to a conduct 5G trial in an actual production environment, and its test users in Hyderabad were able to download “a full length movie” in “a matter of seconds” during the trial.
Airtel had used a technology called dynamic spectrum refarming or DSR to temporarily overlay a 5G network on top of its existing 4G network.
“It’s interesting that one of our competitors is showing DSR in a lab environment, while we have been running it practically on thousands of sites in a production environment for a very long period of time,” Takkar commented. “The technology is the same, whether you use it on 4G spectrum or 5G spectrum.”
What remains to be seen, however, is whether Vodafone Idea manages to attract a suitable investor or partner with deep pockets in time for 5G spectrum auctions that are expected to take place in September this year.