Vodafone Idea tests 5G in Pune on 26 GHz and 3.3 GHz bands: DoT

Although Vi purchased spectrum for 17 circles at the 5G spectrum auctions, only one circle has had 5G testing confirmed. As a result, the telco has fallen short of the government's minimum deployment requirement

The third-largest telecom provider in India, Vodafone Idea, has tested 5G in Pune using the 26 GHz and 3.3 GHz bands. Vi successfully tested 5G on Ghole Road, Pune, according to a tweet from the Maharashtra division of the DoT (Department of Telecommunications).

According to the tweet, the telco accomplished this on August 16, 2023. Although Vi purchased spectrum for 17 circles at the 5G spectrum auctions, only one circle has had 5G testing confirmed. As a result, the telco has fallen short of the government's minimum deployment requirement set forth in the Notice Inviting Application (NIA) for the 2022 5G spectrum auction.

It is important to note that Bharti Airtel and Reliance Jio have both complied with the minimal 5G rollout requirements and are not subject to any fines. However, Vodafone Idea will have to carry out that. Once more, the penalty sum will deplete the company's cash reserves or just increase its indebtedness. Larger worries about the company's future, though, exist right now.

After the moratorium period ends in 2026, Vodafone Idea will be required to make annual regulatory payments to the government totaling roughly Rs 40,000 crore, according to IIFL Securities. This would make it extremely difficult for the corporation to raise any large sum of money against equity. There is a chance that more shares of Vodafone Idea could be switched to government ownership if the company is unable to make timely payments. The largest shareholder in the telco is already the Indian government.

The conversion of Vodafone Idea’s outstanding interest debt of Rs 16,133 crore into equity was given the government’s approval in February this year. With this conversion, the promotions’ ownership has dropped to 50% from 74.99% and the government now holds 33.14% of the cash-strapped telecom company that is struggling under a debt load of over Rs 2 lakh crore. Government rescue measures for debt-ridden telecom businesses were adopted in 2021, enabling them to convert interest on deferred adjusted gross revenue owed to the government into equity.

The centre had previously stated that it would not impede the management of Vi's operations, outlining its position. It only decided to take an equity investment in the business since doing so would aid Vi in the near run and allow the business to regain market share.