Capex growth only after new funding: VIL CEO
The company is in discussions with various network vendors for the finalisation of the 5G roll-out strategy
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New Delhi: Cash-strapped Vodafone Idea (VIL) on Monday said growth capex for 4G coverage expansion and 5G roll-out will happen based on the new funding being tied up and expects to conclude discussions related to equity investors in this quarter.
Speaking at the Q2 earnings call of Vodafone Idea, its Chief Executive Officer Akshaya Moondra said that for 5G, the company is in discussions with various network vendors for the finalisation of the roll-out strategy.
VIL, last week, reported a widening of its consolidated net loss at Rs 8,737.9 crore for the second quarter ended September 30, against a net loss of Rs 7,595.5 crore a year ago. Its consolidated revenue from operations was almost flat at Rs 10,716.3 crore during the reported quarter against Rs 10,655.5 crore in the September 2022 quarter.
The company has been battling financial woes, subscriber losses, and high debt as rivals Jio and Bharti Airtel cement their position in the highly competitive telecom market with 5G services. During the latest earnings call, Moondra said VIL continues to incur some minimal capex but “our growth capex (capital expenditure) in terms of expanding our 4G coverage and also rolling out 5G, which will go side by side, will happen based on the new funding being tied up”. “In the interim, since our cash generation will now be more than our debt servicing, we intend to use this for reaching our regular requirements, regular capex and then to some extent this will go towards reducing the vendor outstanding. But any significant capex will happen after new funding is tied up,” Moondra made it clear.
On the status of funding talks, Moondra said progress had been made since VIL’s last earnings call. “I would expect that we should be able to conclude these discussions, which are relating to the equity investor, in this quarter, which is also what I had indicated in the last quarter,” he said. With the banks, the discussions had happened earlier, he said, adding that “currently our focus is on tying up the equity investment, basis which then the banks will process the request for bank funding and process their internal approval”.
On how the launch of 5G by rivals in the market impacted the company and whether the situation is becoming worrisome, he asserted that so far, VIL has not seen any “significant impact” on the ground.
“Until now, we have not seen any significant impact of 5G not being with us, and being with the competition. 5G will deliver a good experience over a period of time, but whether people are driven by the need for 5G. We’ve not seen any significant impact until now,” he said.
Network investments have been impacted due to liquidity constraints, he admitted. To a question on an update on the previous announcement about one promoter pitching in with financial support of Rs 2,000 crore, the VIL CEO said the telco expects the promoter’s contribution to come alongside the tie-up with external investors.
