Indus Towers Shows Growing Concern Over Vodafone Idea Financial Health

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Vodafone Idea is one of the two big customers of the network infrastructure company Indus Towers, with the other one being Bharti Airtel. However, with the deteriorating finances of Vodafone Idea, the shadow is also looming over Indus Towers as well now. The chain of poor finances is slowly shifting from the telecom companies to the backfoot players as well. In the latest development, Indus Towers has shown concern that if Vodafone Idea’s finances continue to worsen, then it might have to bear the punching as well.  It’s worth noting that Vodafone Idea has had a setback on its plans to Rs 25,000 crore using debt and equity, a plan which Vodafone Idea had shared back in September of 2020.

Vodafone Idea in Talks With Apollo Global Management

In the latest turn of events, Vodafone Idea is also looking forward to foreign investment agencies turning up some capital to pump it into its business. We have already covered, how the network of Vodafone Idea, post its integration exercise has been the single most detrimental factor for subscriber churn. So much so, that even free data offers could not lure more customers towards the telco. In such a situation, if Vodafone Idea finds itself unable to pay the network infrastructure companies such as Indus Towers, then it might not bear well for the ailing company.

Duopoly Would be Bad for the Industry

Vodafone Idea, as per ET Telecom, is looking forward to signing a deal with investment firms like Apollo Global Management. However, the caveat in these deals is likely to be a hard bargain on bank guarantees and extreme equity dilution.  In April month also, Vodafone Idea was the telco to lose the most number of subscribers with 1.8 million churn. However, it is important for the telecom sector to maintain a three-way pull in the private telecom competition. The regulator, government, and the competing telco, Bharti Airtel has also shown concern about a duopoly in the market. That is why the survival of the Vodafone Idea remains a must for the health of the telecom industry.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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