Vodafone Idea Ltd. plans to invest Rs 45,000 crore over the next three years to upgrade infrastructure, mostly funded by debt, company executives told analysts after the third quarter earnings. The new capex will be in addition to the Rs 18,000 crore already invested over the last six quarters, totaling over Rs 60,000 crore in a four to four-and-a-half-year period.
The debt-laden company is not looking at fresh equity infusion at this stage and believes its current funding roadmap, backed by bank loans, promoter support and adjusted gross revenue (AGR) relief, is sufficient to execute its three-year turnaround plan, Chief Executive Officer Abhijit Kishore said. The focus is now on sustained customer additions, double-digit revenue growth and increasing cashflow over the next three years.
Vodafone Idea received a breather from the government in December on payment of its AGR dues. The cabinet decided to freeze the company's Rs 87,695 crore in AGR dues and approved a payment plan for the company to clear them over FY32-41.
Kishore said the telecom operator is targeting Rs 25,000 crore in bank funding and Rs 10,000 crore in non-funded facilities to support its planned capex. With annual Ebitda of around Rs 9,200 crore, the company's debt-to-Ebitda ratio stands at roughly 2.5x, which is manageable for an infrastructure-heavy business, he said.
The telecom operator plans to achieve 4G parity with competitors across its 17 priority circles within two years. Simultaneously, it will expand 5G coverage across urban markets with populations of above 20,000 over the next 12–30 months.
The management also said the telecom industry needs to consider another round of tariff hikes, but Vodafone Idea will wait for larger rivals Reliance Jio and Airtel to take the lead.
Vodafone Idea share price settled 1% higher at Rs 9.94 on the BSE, compared to a 0.6% advance in the benchmark Sensex.
ALSO READ: Vodafone Idea Q3 Results: Telco Trims Net Loss, ARPU Rises 3%
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