Vi expects to be 5G-ready by the end of the next

Vodafone Idea (Vi) is in talks with Samsung to secure network equipment for its ongoing 4G and 5G rollouts, the telecom operator said on Wednesday. Vi has already deployed Samsung's virtualized Radio Access Network (vRAN) solutions in Chennai, Karnataka and Bihar circles.

"With an objective to expand Vi’s 4G footprint and introduce 5G, Vi and Samsung have been engaged for the last 12-18 months on network trials in Chennai," Vi said in a statement.

In view of encouraging trial response and on-a-par performance with incumbent suppliers, Vi has extended Samsung deployments in the Karnataka and Bihar circles, it added.

The telco said these setups have enabled Vi to fulfil its 5G Minimum Rollout Obligation (MRO) in these three circles (Chennai, Karnataka and Bihar) with non-standalone vRAN architecture.

The company seeks to harness the Cloud benefits in the RAN domain. This unique blend of traditional RAN deployments and vRAN allows Vi to embrace new technologies and architecture with better performance and customer experience.

"We are proud to demonstrate our leadership in next-generation radio solutions (vRAN) that can deliver enhanced experience to our customers with better TCO (total cost of ownership). This vRAN deployment, delivered through Samsung’s innovation and joint technological strategic initiatives, is in sync with our technology transformation road map and enriched vendor ecosystem,” said Jagbir Singh, Chief Technical Officer of Vodafone Idea Limited.

Vi expects to be 5G-ready by the end of the next financial year (FY26) and will add more customers by upselling premium plans.

Meanwhile, it also expects to increase its average revenue per unit (ARPU) further by continuously upgrading its subscribers from 2G to 4G. 2G subscribers currently form a sizable 42 per cent of Vi's subscriber base as compared to 28 per cent for Airtel, Nuvama Institutional Equities had said last month after a meeting with the company’s leadership.

Earlier this month, Vi's Board decided to offer a Rs 2,458 crore stake in the financially beleaguered telecom operator to long-term vendors Nokia and Ericsson in a bid to partially clear outstanding dues.

Shares of telecom services provider were in demand on Wednesday with Bharti Airtel hitting a new high of Rs 1,479.50 as its stock rallied 4.5 per cent on the BSE in intraday trade.

Shares of Vodafone Idea (VIL), too, hit a 52-week high of Rs 18.47, surging 7 per cent amid heavy volumes. The stock surpassed its previous high of Rs 18.42 touched on January 1.

Reliance Industries (RIL) was also up nearly 4 per cent to Rs 3,015 in intraday trade. The stock of the country's most valuable company, in terms of market capitalisation, was trading close to its record high level of Rs 3,029.90 touched on June 3. Jio Platforms runs India's largest mobile network operator Reliance Jio.

In comparison, the BSE Sensex was up 0.81 per cent at 78,682 at 02:51 pm.

According to a PTI report, an auction of radio waves that carry voice and data signals for mobile phones ended within two days on Wednesday, garnering less than 12 per cent of the Rs 96,238 crore minimum values that the government had estimated for the spectrum on offer. 

Analysts at BNP Paribas, in May 2024 telecom report, had said that they expected the industry growth rate to accelerate in coming quarters led by tariff hikes which, coupled with moderation in subscriber churn, should augur well for the margins in FY25. Additionally, the brokerage firm expects capex to moderate, which should lead to stronger free cash flow (FCF) generation.

Meanwhile, the stock price of VIL has been rallying over the past eight trading days after the company’s management said VIL is all set to participate in the industry growth with right investments to expand its 4G coverage and offer 5G experience to its customers while remaining focused on its execution capabilities.

"As VIL embarks on its growth journey, support from key stakeholders is critical and the agreement with Nokia and Ericsson reaffirms these vendors as long-term partners of the Company, and sets the stage for the next phase of our growth," the management added.

VIL raised roughly Rs 24,000 crore of equity including conversion of 1,440 optionally convertible debentures (OCDs) in March 2024 by ATC India (out of 1,600 OCDs issued), follow on public offer (FPO) issue in April 2024 and preferential issue to promoters in May 2024.