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Vodafone Idea returns 5 MHz spectrum in the 1800 MHz band in two regions before auctions

Cash-strapped telecom operator Vodafone Idea (Vi) has made the decision to forego the extension of spectrum in the 1800 MHz band in the West Bengal and UP West circles ahead of the upcoming auction scheduled for May 20. This move, aimed at reducing liabilities, involves surrendering the spectrum to the Department of Telecommunications (DoT). According to sources familiar with the matter, Vi has surrendered 5 MHz of spectrum in these two circles. The decision was made as Vi already possesses sufficient spectrum in the 1800 MHz band in these regions and thus chose not to seek an extension.

However, Vi intends to renew its spectrum in the 900 MHz band in these circles through the upcoming auction. The telco currently holds renewals for a total of 12 MHz of spectrum in the 1800 MHz and 900 MHz bands across these two circles, which would have incurred an expenditure of Rs 1,500 crore at reserve prices. Analysts from Jefferies noted that Vi may choose to renew the 900 MHz band, particularly in the West Bengal circle, which could result in an expenditure of approximately Rs 200 crore.


A spokesperson for Vi confirmed the decision, stating, “Upon assessing our usage and needs, we have surrendered some spectrum in both West Bengal and UP West. We remain committed to providing seamless services to our customers while also focusing on optimizing for operational efficiency and future growth.”

Meanwhile, the Department of Telecom recently granted Bharti Airtel a three-month extension for its expiring spectrum. Vi boasts the highest 4G spectrum per million subscribers, positioning it for growth. The telco stated in its investor presentation that it has ample spectrum to support migrating its entire 4G subscriber base to 5G. Additionally, Vi is in the process of refarming spectrum in the 900 MHz and 2100 MHz bands for 4G to enhance customer experience.

Vi aims to focus its investment in 17 circles to improve market competitiveness, with plans to cover 40 percent of revenue in the first 24 to 30 months following its 5G launch. The telco is prioritizing the expansion of its 4G footprint in rural and semi-urban growth markets to drive average revenue per user (ARPU). Furthermore, Vi aims to increase the proportion of high ARPU subscribers through network enhancements and strategic partnerships.

Regarding its plans to roll out 5G services, Vi stated that it would require 6-7 months post-securing funding. Discussions with investors are currently underway, and the telco is engaging with vendors to develop use cases for 5G. Vi is also in the process of raising Rs 45,000 crore in equity and debt, with commitments from anchor investors exceeding $1 billion (Rs 8200 crore).

Union IT and Communications Minister Ashwini Vaishnaw expressed government support for Vi’s fundraising plan, affirming that the government has taken all necessary measures to assist the telco. Despite reporting a narrowed net loss in the December quarter, Vi continues to focus on strategic initiatives aimed at enhancing its operational efficiency and driving future growth.

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