DoT tracking Vodafone Idea's 5G service roll out

The Department of Telecommunications (DoT) is tracking Vodafone Idea's 5G service launch plans as the debt-ridden telecom firm needs to meet the minimum roll out obligations by September-October. No development from the telecom company in this regard has brought it under DoT’s radar, The Economic Times reported.

The roll out obligations require telcos to commercially launch services anywhere in each of the three metros within the first year from spectrum allotment. Apart from that one city should be provided with 5G in each of India’s 22 telecom circles.

Although DoT provides grace periods for telecom companies to meet the requirements, not being able to follow this obligation may lead to a financial fine and in some extreme cases taking back of the spectrum.

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The auction that ended on August 1 in 2022 had Reliance Jio and Bharti Airtel as the winning bidders. Vodafone Idea acquired 3300Mhz and 26GHz 5G bands for Rs 18, 799 crore. The spectrum was allotted in the middle of September 2022, so the obligation starts from that date.

Jio has already made announcements to make 5G accessible across the country while Bharti Airtel plans to reach its goal by March 2024.

On the other hand Vi has remained silent on 5G roll out plans. The cash strapped telco did have trials for 5G equipment with Sweden’s Ericsson, Finland’s Nokia and Korea’s Samsung but hasn’t placed any purchase order with any of them. Vi has been trying to raise funds for a while. Vi’s CEO Akshaya Moondra informed its shareholders that without sufficient funds it won't be able to come up with a timeline for 5G launch. The company is stuck in a loop where it is unable to acquire external investment without sufficient government funds and the government is looking at the external investments to provide funds or convert equity.

Till September, it stood at a net debt of around 2.2 lakh crore and gross cash balance of Rs 190 crore.