Mumbai: Vodafone Idea will roll out its 5G services soon, Kumar Mangalam Birla, chairman of the Aditya Birla group, told CNBC-TV 18 on the sidelines of an event. Birla, however, did not disclose when the roll-out will begin.
Vodafone Idea, which has been strapped for cash, has been lagging behind Reliance Jio and Bharti Airtel, which have been busy expanding their 5G networks to various cities.
Observers had pointed out that the delay could see Vodafone Idea losing more subscribers. Subscriber numbers for January had showed that in the mobile telephony or wireless segment, Reliance Jio and Bharti Airtel added 1.65 million and 1.28 million customers, respectively. Vodafone Idea lost 1.35 million subscribers in the same month.
Vodafone Idea was recently in the news when it reportedly paid 10 per cent of the January-March quarter licence fee due, even as it sought more time from the Centre to clear the remaining 90 per cent in multiple tranches by July 31. At present, telcos pay 8 per cent of their adjusted gross revenue as licence fee to the government
Last month, a domestic brokerage said in a report that Vodafone Idea is looking at a bleak future, including the possibility of “shutting shop” due to factors triggered by heightened competition.
The analysts, who expect telecom companies to start hiking tariffs only after the general elections in June 2024, said that in the absence of the price hikes, Vodafone Idea will not be able to keep up with the investments required and launch 5G services, which will lead to an erosion of subscribers and make the planned capital raising exercise difficult.
According to the report from Kotak Institutional Equities, the long-feared prospect of a “duopoly”, with only Reliance Jio and Bharti Airtel remaining in the fray, is likely to play out.
At present, the deep-pocketed Jio’s renewed aggression is being matched by Airtel, as both the telcos seek to garner premium subscribers, it said.
“According to our estimates, Vi stares at a cash shortfall of Rs 5,500 crore over the next 12 months and a delay in tariff hike/fund-raise, could lead to Vi shutting shop,” it said.
