New Delhi: Deep in debt Vodafone Idea A top company official on Thursday said 5G is expected to be priced at a premium with more data bundled with the plans as compared to 4G services at present.
Vodafone Idea (luxury) Managing Director and Chief Executive Officer Ravinder Takkar said during an earnings call that the company has spent a significant amount in acquiring spectrum in the recently held auction, for which premium is required to be charged. 5G Services,
It expects the overall tariff for mobile phone services to increase by the end of this year.
“Given the fact that a lot of money has been spent on spectrum, we believe that 5G should be priced at a premium to 4G. You can price it at a premium, but of course within that premium you have such There could be situations where given the extra bandwidth you get in a 5G, the number of gigabytes you get is higher because you’re potentially consuming more.”
He said that the increase in data consumption 5G network Will depend on the use cases developed and adopted by the consumers.
VIL acquired spectrum worth Rs 18,800 crore, which includes radiowaves in mid band (3300 MHz band) in 17 priority circles and in 26 GHz band in 16 circles for 5G services. The company also secured additional 4G spectrum in three circles of Andhra Pradesh, Karnataka and Punjab.
The fresh spectrum bid adds an annual installment liability of Rs 1,680 crore on the company.
VIL narrowed its consolidated loss for the June quarter to Rs 7,296.7 crore compared to the year-ago period, as the tariff hike boosted its realisations. The telco’s loss stood at Rs 7,319.1 crore in the year-ago quarter.
VIL’s revenue from operations increased to around Rs 10,410 crore for the quarter ended June 30, 2022, an improvement of about 14 per cent over the year-ago period.
Its average revenue per user or ARPU – a key watchdog for telecom players – stood at Rs 128 per subscriber for the quarter, as against Rs 104 in Q1 FY22. This represents an improvement of 23.4 per cent year-on-year, helped by the tariff hike.
“Just to summarize, on 4G pricing, I think there’s certainly an opportunity based on the value that’s been consistently provided to consumers and how the first few price increases have been seamlessly absorbed, I think. Looks like there is an opportunity to do it soon,” Takar said.
He also said that investments in the company’s network have been affected due to liquidity issues.
VIL Chief Financial Officer Akshay Mundra said the company has strategically bid for spectrum and its ongoing fundraising plans include capital expenditure calculations for 5G network.
The debt-ridden firm said the fundraising exercise has gained positive momentum with the recent investments by promoters in the company.
At the end of April-June 2022 quarter, VIL’s total gross debt (excluding lease liabilities and interest accrued but not outstanding) stood at Rs 1,99,080 crore, including deferred spectrum payment obligations of Rs 1,16,600 crore, AGR liabilities was included. 67,270 crores which are dues to the government, and Rs 15,200 crores of debt from banks and financial institutions.
Mundra said the company has cleared a lot of bank loans and Telecom Deptt (DoT) has returned bank guarantees worth Rs 17,000 crore.
“We are engaged with the bank that our exposure has been reduced. Look at our external debt and EBITDA, we are in a very comfortable position. There is a very long moratorium to service the government debt. Banks understand this and our Based on discussions with them, we should be able to take this to a conclusion in the near future. We will mainly take fresh debt for investment,” he said.
Talking about converting interest into equity allocation to the government, Mundra said that the company has confirmed an amount of Rs 16,130 crore to DoT and final confirmation from the department in this regard is awaited.
The government is expected to get around 33 per cent stake in VIL once the interest is confirmed to be converted into equity.
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