The board of cash-strapped Vodafone Idea (VIL) is slated to meet on October 21 to consider issuance of debentures convertible into equity shares on a preferential basis to a vendor, the telco has said.
The move comes amid large-scale network deployments across the country for 5G services, the much-talked about next-generation technology that promises ultra-high internet speeds, lag-free connectivity, and new-age applications.
VIL's larger rivals, both Reliance Jio and Bharti Airtel, have drawn up ambitious plans and committed firm timeines for expanding network coverage in India, the world's second-biggest smartphone market after China.
Vodafone Idea, the country's struggling third telecom player, plans to begin the journey to roll out 5G services, but has not offered specific timelines for the launch or coverage.
"...we wish to inform you that a meeting of the board of directors of the company is scheduled to be held on Friday, 21st October...to consider and evaluate a proposal for issuance of debenture securities convertible into equity shares on a preferential/private placement basis to a vendor," VIL said in a BSE filing.
The company did not divulge more details, including the name of the vendor, but said the proposal is subject to regulatory and statutory approvals, including shareholders' nod.
Aditya Birla Group Chairman Kumar Mangalam Birla -- while speaking at the inauguration of India Mobile Congress 2022 and launch of 5G services in the country by Prime Minister Narendra Modi on October 1 -- had said the company will begin 5G roll-out journey soon.
"We will soon begin 5G roll-out journey. We will leverage our strong presence in rural India, our enterprise customers, our tech partners, and global experience of Vodafone Group for progressively rolling out our 5G network and services in the coming period," Birla had then said.
It is pertinent to mention that financial pressures have been mounting on debt-ridden Vodafone Idea, despite the company opting to convert about Rs 16,000 crore of interest liability payable to the government, into equity.
Earlier, mobile tower giant Indus Towers is learnt to have asked Vodafone Idea to clear outstanding dues and pay on time every month for continuity of business post-November.
Sources at that time had said that American Tower Corporation (ATC), which has 75,000 mobile towers in India, too was mulling steps to secure its dues.
Earlier this week, European telecom gear makers Ericsson and Nokia separately announced bagging contracts from India's largest telecom operator Reliance Jio to build a mega 5G network.
Jio had announced it will start the beta trial of 5G services in four cities of Delhi, Mumbai, Kolkata and Varanasi from October 5 with a select set of customers.
Meanwhile, top mobile phone makers, including Apple and Samsung, have said they will upgrade the software for their 5G-enabled phones in India.
Prime Minister Narendra Modi on October 1 launched 5G services amid much fanfare, with leading telecom operators Bharti Airtel and Reliance Jio outlining plans for the roll-out of the services in a select cities.
But most users in those select cities haven't yet got smooth 5G services, leading to a blame game -- telecom operators blame the delay in smartphone companies pushing out required software patches over the air, and the handset manufacturers rue patchy infrastructure.
With 5G not just enabling faster internet but also holding the promise of rapid economic progress and boosting job creation, the government has asked companies to get cracking now. And many companies have started falling in line -- last week many smartphone players committed specific timelines for upgrading the software for their 5G-enabled phones.
