Vodafone Idea stock gains 4% as telco completes 5G rollout obligation in all circles

Tanushree Jaiswal Tanushree Jaiswal

Last Updated: 21st June 2024 - 05:42 pm

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Shares of Vodafone Idea increased by approximately 4% following a report that the telecom service provider had fulfilled its 5G rollout obligations in all circles. The company holds 5G spectrum in 17 circles and has completed the rollout requirements in both spectrum bands.

Vodafone Idea completed network testing in both spectrum bands, as conducted by the Department of Telecommunications. The company fulfilled its rollout obligations with a penalty of approximately ₹1 crore, according to a report by CNBC Awaaz citing sources.

Notably, fulfilling rollout obligations according to the terms of the license is mandatory. Failure to complete the rollout as per these terms could have led to actions against the company, including the potential cancellation of Vodafone Idea's 5G spectrum. The company had a deadline of August 15, 2024, to meet these obligations.

Earlier this week, Vodafone announced the sale of an 18% stake in Indus Towers for €1.7 billion (approximately ₹15,300 crore). The company stated that it would use the majority of the proceeds to repay €1.8 billion in outstanding bank borrowings secured against Vodafone's assets in India.

Persistent pressure from lenders regarding an outstanding loan taken about five years ago was one of the key reasons why the telco's UK parent decided to sell its stake.

Vodafone Idea recently raised ₹18,000 crore through the country's largest Follow-on Public Offer (FPO) and an additional ₹2,075 crore through a promoter group entity, thereby completing its ₹20,000 crore equity fundraising exercise.

At 1:23 pm IST, Vodafone Idea shares were trading 3.4% higher at ₹17.09 on the National Stock Exchange (NSE). Over the past year, the stock has gained 120%, more than doubling investors' money. In comparison, the Nifty delivered returns of around 25% during the same period.

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