Vodafone Idea CEO Outlines Strategies, Plans ₹18,000 Crore FPO to Fuel Growth

In an exclusive Q&A session, Akshaya Moondra, CEO of Vodafone Idea, provided insights into the telecom giant’s future plans, including strategies for subscriber retention, capital raising, capacity expansion, and industry tariff hikes.

Vodafone Idea recently launched an ₹18,000 crore Follow-on Public Offering (FPO), with notable investors such as Fidelity, GQG, and UBS participating in the anchor book. The government, being the largest shareholder in the telecom operator, has also extended support for the FPO.

Moondra emphasized that the raised capital will primarily be allocated for growth capital expenditure (capex), alongside discussions with lenders for additional funding. This funding will be crucial for expanding 4G coverage, capacity growth, and the rollout of 5G technology, positioning Vodafone Idea to compete more effectively in the telecom market.

Regarding capex plans, Moondra outlined a breakdown of the funds, with approximately ₹12,750 crore designated for capex and spectrum acquisition. Out of this, around ₹5,720 crore will be allocated for 5G rollout, while the remaining ₹7,000 crore will be directed towards 4G coverage expansion and capacity growth.

Moondra highlighted the importance of enhancing 4G coverage to address subscriber churn and emphasized the potential for rapid expansion given the readiness of vendors and existing infrastructure. While he refrained from providing a specific timeline for subscriber decline reversal, he expressed confidence in the speed of 4G coverage expansion.

On the topic of 5G, Moondra explained the cautious approach, citing the need for viable monetization models and the lack of significant consumer demand for 5G services. He indicated that while 5G rollout plans could evolve, the focus remains on optimizing investments and addressing market realities.

Regarding tariff hikes, Moondra underscored the need for adjustments to achieve a return on investment, highlighting the industry’s prolonged struggle to meet cost of capital requirements. While he refrained from specifying target ARPUs, he acknowledged industry trends indicating a potential rise to around ₹300.

In conclusion, Moondra hinted at the possibility of tariff hikes post-elections, drawing from past market responses to such adjustments. He emphasized consumer willingness to accept moderate price increases, signaling potential industry shifts in the near future.

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