Telecom company Vodafone Idea’s ₹18,000-crore follow-on public offer (FPO), if successful, would be good news for its lenders but not its shareholders. While existing lenders would have improved visibility on repayments, there could be a fresh lending opportunity of ₹25,000 crore as the company intends to raise new debt using the elbow room provided by the fresh equity.
One of the objectives of the FPO is to expand network coverage by spending ₹7,030 crore on 4G and ₹5,720 crore on 5G. An analysis of the capital expenditure (capex) per site reveals that the company’s cost of setting up 4G and 5G is almost identical at ₹25 lakh.
Even with 5G technology available, the company is still following the strategy of expanding its 4G network. This could be because larger rivals such as Jio and…
