Vodafone Idea has decided to pay for its spectrum purchases from the June auction in instalments. The company, which owes ₹3,510 crore, confirmed this plan to Mint but did not specify how much it will pay in the first year.
Analysts Say
Vodafone Idea can pay this amount in 10 equal instalments of ₹350 crore each, with an interest rate of 8.65% for a 20-year license. According to analysts at Motilal Oswal Financial Securities Ltd, this annual instalment payment plan could increase the company’s debt by 1.4%, bringing it to ₹2.3 trillion. The annual instalment of ₹350 crore will be 2.7% of Vodafone Idea’s earnings before interest, tax, depreciation, and amortisation (EBITDA).
Last month, Vodafone Idea, Bharti Airtel, and Reliance Jio purchased 141.4 units of airwaves for ₹11,340.78 crore. Bharti Airtel was the biggest buyer, acquiring 97 MHz for ₹6,857 crore. Vodafone Idea and Reliance Jio bought 30 MHz for ₹3,510.4 crore and 14.4 MHz for ₹973.62 crore, respectively.
Acquired Airwaves
Vodafone Idea acquired airwaves in the 900 MHz spectrum in UP West and West Bengal circles, adding to its holdings in seven circles: Andhra Pradesh, Tamil Nadu, Karnataka, Punjab, Rajasthan, UP East, and Kolkata. This move aims to improve the 4G experience for its customers. In Andhra Pradesh, Tamil Nadu (excluding Chennai), Punjab, and large parts of Karnataka and Uttar Pradesh (East), Vodafone Idea will offer 4G on the sub-GHz 900 band for the first time, leading to better coverage and user experience.
Additionally, the company acquired 1800 MHz spectrum in Madhya Pradesh and 2500 MHz spectrum in Bihar, which will help increase network capacity quickly.
CEO’s Statement
Akshaya Moondra, CEO of Vodafone Idea, stated that the company strategically acquired spectrum in select markets to enhance and strengthen its overall spectrum portfolio. He mentioned that this acquisition will allow Vodafone Idea to use dedicated sub-GHz spectrum for advanced technologies, improving the experience for their customers and strengthening their competitive position in the market.
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