Vodafone Idea not in favour of 5G spectrum auction before 2020: CTO

Last year, Idea and Vodafone completed the merger of their India operations to create the country's largest telecom operator to take on competition from rivals Reliance Jio and Bharti Airtel.

New Delhi: India's largest telecom operator Vodafone Idea Ltd said on Wednesday that 5G spectrum auction should not be held before 2020 to allow for more time to evolve India-specific use cases and added that its current holding of radiowaves helps it to offer many 5G-like services.

The operator - which holds 35.6 per cent of the total wireless subscriber market share as per latest TRAI data - also said it will comply with the decision of the Indian government on the issue of use of communications equipment of Chinese vendors, such as Huawei.

"In Indian context, government has not taken a position unlike some other countries like Australia, New Zealand, and the US have taken a clear position...Of course, we will follow whatever the Indian government decides and we will work with the government to ensure that India's strategic needs and security are fully looked after," Vodafone Idea Chief Technology Officer Vishant Vora told reporters here.

The comments come at a time when the some countries, including Australia, have banned Huawei equipment from 5G rollout, while the US has gone on an outright offensive against the Chinese telecom gear firm alleging security concerns.

In India, Swadeshi Jagran Manch has called for ban on Chinese telecom equipment as also Chinese social media and e-commerce apps. Vora declined to speak on specific arrangements the operator has with its equipment vendors.

He said that the full integration of the two telecom networks - Idea Cellular and Vodafone India - post the mega merger last year is "on track" and expected to be completed by June 2020.

Last year, Idea and Vodafone completed the merger of their India operations to create the country's largest telecom operator to take on competition from rivals Reliance Jio and Bharti Airtel. British telecom major Vodafone holds 45.1 stake in the combined entity, while Kumar Mangalam Birla-led Aditya Birla Group controls 26 per cent and Idea shareholders own 28.9 per cent.

"We, at the time of merger, had said it will take three years for completing the integration of the network. We have since then revised that estimate and said we will complete this by June 2020 which is half the time. We are on track for that," Vora said.

Asked whether the company is in favour of auction of radiowaves this year, Vora said that the firm has the capability of near-5G services even with its current spectrum repository.

"The year 2020 (timeline) and spectrum issue is different. It is not about us running out of spectrum. It is more related to developing India specific use cases for 5G. And given the current focus on giving high speed broadband services across vast geography of India, we believe the industry needs to stay focused on that mission and 5G is something much more suitable that can come after 2020," he said.

Vora added: "The most appropriate time to hold auctions will be somewhere after 2020" but did not specifically comment on whether the company would, at all, participate in auctions if they were to be held this year.

The telecom sector has been bruised by falling tariffs, eroding profitability, and mounting debt in the face of stiff competition triggered by disruptive offerings of Reliance Jio, owned by India's richest man Mukesh Ambani. The industry has been seeking urgent relief measures entailing debt restructuring, cut in levies, and release of GST input tax credit locked up with the government.

The total debt of Vodafone Idea, alone, stood at Rs 1,23,660 crore at the end of December 31, 2018, while its consolidated loss for the third quarter of 2018-19 stood at Rs 5,005.7 crore.

The company is also planning to raise Rs 25,000 crore through rights issue, in which the promoter shareholders -- Vodafone Group and Aditya Birla Group -- have reiterated to the board that they plan to contribute up to Rs 11,000 crore and Rs 7,250 crore, respectively as part of such rights issue.

(Inputs from PTI)