Shares of Vodafone Idea were gaining on Wednesday after the firm reportedly met the minimum conditions for 5G operations.

What Happened: Vodafone Idea has met its 5G minimum roll-out obligations in four important circles including Delhi, Chennai, Pune and Punjab, Moneycontrol reported, citing sources.

In a recent telecom department meeting discussing these obligations, Vodafone Idea reaffirmed its commitment to fulfilling requirements in four to six more circles in the upcoming months, the sources told the publication.

This marks a significant step for Vodafone Idea, which has been facing financial constraints and is in discussions with investors to raise up to ₹45,000 crore in equity and debt. The company secured spectrum in the 3300 megahertz and 26 gigahertz 5G bands during the 2022 auctions, and meeting roll-out obligations is crucial for retaining its 5G licenses.

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Non-negotiable commitment: Telecom operators are required to commercially launch services in both metro and non-metro circles within the first year of acquiring 5G spectrum. This entails making services available in at least one area within a circle, with similar provisions applicable to non-metro cities.

In January, the Department of Telecommunications issued a show cause notice to Vodafone Idea over its failure to meet minimum roll-out obligations, potentially facing fines of approximately ₹14 crore. Adani Data Networks, another recipient of the notice, could face a penalty of around ₹6 crore.

In August 2023, Vi stated it invested in two out of 17 circles to meet the minimum roll-out obligation and intended to roll out a 5G commercial network beyond the minimum obligation circles.

Vi recently announced the commencement of live commercial data traffic on its Open RAN network, indicating progress towards larger-scale deployment of its 5G network. Collaborating with Mavenir, a US-based telecom gear maker, Vi initiated the commercial phase of the Open RAN network pilot deployment in September in Punjab’s Jalandhar.

Vodafone Idea is aiming to raise ₹45,000 crore in equity and debt, having secured equity commitments from anchor investors exceeding $1 billion (₹8200 crore).

Price Action: Vodafone Idea’s share price was up 1.32% at ₹70.41 in morning trade on Wednesday.

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