Indus Towers Still Waiting for Payments to Stabilise from Vi: Report

It is worth noting that Sunil Bharti Mittal, Chairman of Bharti Enterprises, which owns a majority stake in Indus Towers, said that Vi would have to clear all the past dues to roll out new technologies. This meant 5G networks.

Highlights

  • Indus Towers, a telecom tower infrastructure company, is still waiting for the payments to stabilise from its key customer Vodafone Idea Limited (VIL).
  • While Vi has been clearing the current dues on time, there's still a backlog that hasn't been cleared.
  • Vi is slowly clearing some of the backlog dues to the vendors and the tower company.

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Indus Towers, a telecom tower infrastructure company, is still waiting for the payments to stabilise from its key customer Vodafone Idea Limited (VIL). While Vi has been clearing the current dues on time, there's still a backlog that hasn't been cleared. For that, Indus is yet to receive any clarity over how and when Vi will make the payments. However, having raised funds, Vi is slowly clearing some of the backlog dues to the vendors and the tower company. Indus Towers saw its trade receivables falling 11.3% sequentially to around Rs 5,772 crore in the first quarter as collections from Vi improved, according to an ET report.




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Speaking at the earnings call, Vikas Poddar, Chief Financial Officer at Indus Towers said, "Stability on trade receivables can be expected a few months down the line, but we can’t give a concrete timeline yet as discussions are still ongoing with our key customer on finalisation of its payment plan for full clearance of past overdues."

It is worth noting that Sunil Bharti Mittal, Chairman of Bharti Enterprises, which owns a majority stake in Indus Towers, said that Vi would have to clear all the past dues to roll out new technologies. This meant 5G networks. So it will be crucial for Vi to provide a stable payment plan to Indus Towers if it wants to start rolling out 5G at scale in the future.

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So far, Vodafone Idea Limited has cleared Rs 1,300 crore from the old dues towards Indus. The tower company is engaging in a share buyback activity to distribute cash to shareholders in a tax-efficient manner. It will be interesting to see if Vodafone UK, which holds a 3.06% stake in the company will participate in this or not.

Reported By

Tanuja is a passionate technology and telecom buff who has been following the telecom industry for several years now.

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