Third-largest telco has opted to pay up in instalments ₹3,510 crore for spectrum it bought in the June 2024 auctions. It can pay in 10 equal instalments of ₹350 crore each with an interest of 8.65% for a 20-year licence.
Gulveen Aulakh
Published27 Jul 2024, 06:30 AM IST
Vodafone Idea will consider fundraising at a board meeting on 27 February. (Photo: Reuters)
Struggling telecom operator Vodafone Idea has decided to make payments for its spectrum purchases made in June in instalments. The company, which has to pay ₹3,510 crore, confirmed the plan in response to a query from Mint, but declined to share how much it will pay in the first year.
Vodafone Idea can pay in 10 equal instalments of ₹350 crore each with an interest of 8.65% for a 20-year licence. Analysts at Motilal Oswal Financial Securities Ltd had said in their report soon after last month's auctions that an annual instalment payment plan can increase its debt by 1.4% to ₹2.3 trillion. At ₹350 crore, the annual instalment will be 2.7% of Vodafone Idea's earnings before interest, tax, depreciation and amortisation, the brokerage had said.
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141.4 units of airwaves
Vodafone Idea, along with Bharti Airtel and Reliance Jio, had bought 141.4 units of airwaves for ₹11,340.78 crore last month.
Bharti Airtel was the biggest spectrum buyer, purchasing 97 MHz for ₹6,857 crore, data from the DoT showed, while Vodafone Idea and Reliance Jio bought 30 Mhz spectrum worth ₹3,510.4 crore and 14.4 MHz worth ₹973.62 crore, respectively.
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Vodafone Idea had bought airwaves in 900 MHz spectrum in UP West and West Bengal circles, adding to its holding in seven circles of Andhra Pradesh, Tamil Nadu, Karnataka, Punjab, Rajasthan, UP East and Kolkata, aimed at enhancing experience of its 4G customers.
In circles of Andhra Pradesh, Tamil Nadu (excluding Chennai), Punjab and large parts of Karnataka and Uttar Pradesh (East), 4G on sub-GHz 900 band will be offered for the first time which will result in better coverage and experience, Vodafone Idea had said after the auctions.
The company has also acquired 1800 MHz spectrum in Madhya Pradesh and 2500 MHz spectrum in Bihar, which will help in increasing the network capacity quickly.
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Akshaya Moondra, CEO, Vodafone Idea, had said the carrier had strategically acquired spectrum in select markets to enhance and strengthen its overall spectrum portfolio. “This acquisition will enable us to effectively use dedicated sub GHz spectrum towards advanced technologies to enhance the experience we offer to our customers,” he said, adding that spectrum acquisition would further strengthen its competitive position in the market