Vodafone Idea may exit WiFi venture with Airtel

Ayushi Kar | | Updated on: May 23, 2022

| Photo Credit: DANISH SIDDIQUI

Firefly unable to make an impact due to availability of cheap data plans

Vodafone Idea may exit from Firefly Networks Limited, the joint venture with Airtel. The JV between India’s two largest telecom operators was incorporated in 2014 to provide public WiFi hotspot services. As the 4G revolution made data plans cheaper and access to mobile broadband services in urban areas more ubiquitous, Firefly Networks has been unable to make an impact, thus motivating Vi to consider potentially exiting from the joint venture. 

In an interaction with BusinessLine, Vodafone Idea CEO Ravinder Takkar said: “I think we might potentially exit from the joint venture. At the moment, both companies are not investing much attention into the joint venture.”

Explaining the logic behind the formation of the joint venture, Takkar said: “The business case behind that joint venture was that we were at a point as a country. I think this was right after the 3G auction. There was very little 3G spectrum, and we were expecting a tsunami of data to come. Thus, we were worried that with the little spectrum we had, how we would cope with that situation. The whole idea behind it was to build a common JV to offload the data traffic onto local WiFi networks.”

4G wave

However, 3G services did not bring the surge in data traffic as predicted by operators. The data demand revolution was ushered in by the 4G wave, which was also a time when spectrum was more plentiful for operators. 

Since then, even the Central as well as Delhi government, have tried to launch public WIFi services such as Kejriwal’s 2019 initiative or the Centre’s PM-WANI, which saw limited success. Cheap 4G data services offered by private operators such as Jio, Airtel and Voda Idea being one of the major reasons.

Fund-raising plans

As Vodafone Idea gets closer to its fund-raising goal, the company is rethinking its decision to sell the major assets held by it. Takkar said Vi’s plans to monetise ₹7,600 crore worth of assets on the backburner. In 2021, the company hoped to sell its fixed-line broadband subsidiary, along with its data centre businesses and optic fibre unit, to pay debt, spectrum and AGR dues. “We currently have funding plans, we have government packages coming out…we don’t see asset sale to be the right thing to do at this point,” said Takkar. 

Published on May 23, 2022
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