A man walks across the LED display board showing the logo of Vodafone-Idea.
Credit: Reuters Photo
New Delhi: Telecom operator Vodafone Idea (VIL) will make significant investments to roll out 5G network and expand 4G coverage in the coming quarters, billionaire industrialist Kumar Mangalam Birla promised on Friday.
His statement also underlined the troubled telco's resolve to strengthen service capability and offerings with fifth-generation services.
Birla, chairman of Aditya Birla Group, which is one of the shareholders of the crisis-ridden VIL, was speaking at the inaugural session of the India Mobile Congress (IMC).
"In the coming quarters, Vodafone Idea will initiate significant investments in order to roll out 5G networks and further expand 4G coverage across the country. Moreover, the company is determined to realise the government's vision of establishing a robust supply chain in critical and emerging areas, including Open RAN (Radio Access Network)," he said.
Further, Birla said this endeavour will enable innovative Indian companies to design both hardware and software for the global markets.
The comment assumes significance as VIL has been battling financial woes and subscriber losses, as rivals Jio and Bharti Airtel cement their position in the highly competitive telecom market with 5G services.
At IMC, the largest industry showcase of India's telecom prowess, Birla said: "India's digital ecosystem stands on the brink of unprecedented growth."
India's digital revolution is gaining global prominence as a benchmark for promoting both digital transformation and inclusive growth.
"India has really emerged as a champion for the global south inspired by Prime Minister's vision," Birla said, noting that many countries in the global south are now eager to adopt India's 'pathbreaking' digital public infrastructure assets across identity, payments and data management.
Vodafone Idea, he said, is committed to being a responsible partner in achieving Prime Minister Narendra Modi's vision.
"Over the past year, the Vodafone Idea team has worked diligently to prepare the core network for the 5G deployment," Birla said.
The company's management has focused on creating customer value for over 220 million citizens and thousands of enterprises by providing superior data and network experience as well as building a differentiated digital experience.
"VIL has successfully developed a range of advanced use cases poised to make a tangible difference across crucial sectors such as agriculture, infrastructure, automotive, logistics, and many others," he said.
This encompasses the entire value chain of enterprises, as well as MSMEs (Micro, Small and Medium Enterprises) which he termed as 'engines for growth and employment' contributing significantly to India's progress.
The telco (Vodafone Idea) on Thursday reported a widening of its consolidated net loss at Rs 8,737.9 crore in the second quarter that ended September 30. The company had posted a net loss of Rs 7,595.5 crore a year ago.
Vodafone has made a provision of Rs 822 crore for tax liability arising out of a Supreme Court judgement on October 16 to treat the revenue share license fee as a capital expense.
VIL has incurred a loss of Rs 16,566.7 crore for the six months ended September 30, 2023. Its net worth at the end of the reported quarter stands at negative Rs 90,411.1 crore.
As of September 30, 2023, the total external debt of the company stood at Rs 2,12,784.6 crore.
The total debt on VIL includes deferred spectrum payment obligations of Rs 1,35,130 crore and AGR (adjusted gross revenue) liability of Rs 68,180 crore that are due to the government, debt from banks and financial institutions worth Rs 7,860 crore and optionally convertible debentures amounting to Rs 1,610 crore.
"The company has exchanged correspondences and continues to be in discussion with the lenders for the next steps/waivers. The existing debt as payable by September 30, 2024, is Rs 7,174 crore," VIL said in a recent filing.
VIL leadership has made several attempts to raise funds, but apart from a minor infusion of capital from promoters and relief from the government by way of converting dues of around Rs 16,333 crore into 33.44 per cent equity, there has been no other success for the company.
According to the filing, the company's ability to continue as a going concern is dependent on raising additional funds as required, successful negotiations with lenders and vendors for continued support and the generation of cash flow from operations that it needs to settle its liabilities as they fall due.