Vodafone Idea Ltd is gearing up to significantly bolster its network infrastructure with a crucial investment plan that comes alongside its announcement of a follow-on public offer (FPO). The company is poised to propel its services into a new era with the implementation of a robust Rs 18,000 crore FPO, of which a substantial Rs 12,750 crore has been earmarked for expanding its current network capacity. This ambitious move is slated to commence with the FPO opening up from April 18 to April 22, featuring a price band of Rs 10-11 per share.
Discerning a pivot in the telecommunication landscape, Vodafone Idea proposes to allocate a lion’s share of this investment—Rs 5,720 crore—specifically towards establishing its 5G network. This decisiveness in the face of the company’s present challenges reflects a determined strategy to leapfrog into the 5G revolution. In the fiscal year 2025, the company has outlined plans to erect 10,000 new 5G sites, with a hefty investment of Rs 2,600 crore. Following this, the fiscal year 2026 will witness a further erecting of 12,000 5G sites, backed by an intensified investment of Rs 3,120 crore.
The optimism surrounding Vodafone Idea’s strategic shift appears to be resonating within the market as well, with shares of the company experiencing a positive upswing. The shares closed at 1.54 per cent higher at Rs 13.16 on the BSE this Monday, perhaps reflecting investor confidence in the company’s long-term vision.
Following the equity round’s successful closure, which is expected to gross Rs 20,000 crore including a promoter infusion of Rs 2,075 crore, Vodafone anticipates pursuing an additional Rs 25,000 crore in debt funding. This financial maneuvering is critical as the company looks ahead to the future of its operations and service offerings.
A particular emphasis is placed on the sizable subsection of Vodafone Idea’s subscriber base, with approximately 42 per cent of users still reliant on 2G services. Acknowledging this, Vodafone Idea’s Chief Executive Akshaya Moondra highlighted the importance of transitioning these customers to more advanced 4G networks. The company identifies this migration as a pivotal factor that can triple the Average Revenue Per User (ARPU) as customers transition from basic plans to unlimited data offerings.
The company also has an eye on its strategic shareholder mix. Currently, the Government of India holds the largest share in Vodafone Idea at around 32 per cent. With the ongoing equity dilution, the government’s share is expected to decrease to 24 per cent. This anticipated shift gives the company strategic leeway as it anticipates the potential introduction of a reforms package in FY26, a critical juncture when the moratorium period for spectrum payments concludes.
Vodafone Idea is thus at a crossroads, with these developments forming the backbone of their attempt to reinvigorate their network and elevate their competitive standing in the fast-evolving telecom sector. The aforementioned financial injections signify more than just figures on balance sheets—they represent the company’s resolute commitment to its envisioned expansion, technological upgrades, and most importantly, its considerable customer base yearning for connectivity that meets global standards. As Vodafone Idea orchestrates this well-capitalized push into more technologically advanced spheres of telecom, the market watches with bated breath, anticipating the transformation that lies just on the horizon.
