The company that recently raised Rs 24,000 crore by selling shares had said the deal marked the first step towards the rollout of its “transformative” three-year capex plan of Rs 55,000 crore, aimed at expanding the 4G population coverage from 1.03 billion to 1.2 billion, launching 5G in key markets and capacity expansion in line with data growth.
While experts had termed the deal, which is the largest by any telco this year, as a significant step in terms of network capex, they felt that additional investments would be needed for Vi to get at par with its stronger rivals, especially after the Supreme Court rejected a curative petition seeking to recompute dues linked to adjusted gross revenue (AGR). This ruling effectively confirmed its statutory dues of over ₹70,000 crore, payable from FY26.
Since the merger of Vodafone India-Idea Cellular in 2018, which briefly made the combined company the largest telecom operator in the country, Vi has been consistently posting losses and erosion of its customer base. It has lost 19 percentage points in market share since the 2018 merger due to inadequate network spends, say analysts.
“Any reduction in AGR dues would have given some relief to the company at freeing cash flows for incremental investments, but now that hope is also gone. The cash-flows are going to be constrained going forward,” said an analyst on condition of anonymity.
The company, however, is optimistic about raising funds going forward and it has already completed techno-economic evaluation of its long-term projections by an independent third party. “The report has been submitted to all the banks and financial institutions. Based on this report the banks will now progress with their internal evaluation and approval processes,” Vi said.Since Vi would be rolling out the network after a profound delay, it aims to capitalise on it by putting up the latest state-of-the-art equipment to offer enhanced customer experience. Further, the learnings and insights obtained by the vendors in the Indian market over the last two years will enable the company to embark on a more flexible and modular rollout plan by customising the services for all advanced technologies (4G and 5G), the company said.Supplies under the network deals will start arriving in the coming quarter and the top priority for the company is to expand the 4G coverage. Rival Bharti Airtel is also planning to put in $1 billion capex over three years to expand its 4G coverage.
