Vodafone Idea Wants Another Year to Pay Spectrum Dues

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Vodafone Idea

Vodafone Idea (Vi), India’s third-largest telecom operator, has asked for more time to pay spectrum dues from the Department of Telecommunications (DoT). Everyone aware of the industry knows how difficult situation Vi is in financially. But after the earnings release from the telco two days back, it has become clearer that Vi isn’t close to making profits and has a mountain of debt on its shoulders. Vodafone Idea has asked the telecom department for another year to pay the spectrum dues that the telco has to pay by April 9, 2022.

Vodafone Idea Can’t Pay Spectrum Dues Because of Other Debts

Vodafone Idea’s cash flow is not good. The telco needs to pay several dues to the government, including adjusted gross revenue (AGR) and spectrum dues. As per the Supreme Court order, Vi had to pay Rs 7,854 crore upfront in relation to AGR dues and is scheduled to pay the first instalment in March 2022.

As per an ET Telecom report, Vodafone Idea wrote to the telecom secretary of India, Anshu Prakash, requesting for another year to pay the spectrum dues. The telco wants to pay the spectrum dues in April 2023 instead of 2022.

Vi said in the letter that it is making the request this early because it would take time for the DoT to process this request internally.

Vi will also need to make a payment of about Rs 9,000 crore in March 2022 for AGR dues. The telco has further asked the telecom department to make corrections to the AGR amount calculated. Upon its independent calculation, Vi said that the actual amount it owes is about half of what the government has calculated.

Vodafone Idea Can’t Get Investors Because of Industry Health

Vodafone Idea further said that the health of the Indian telecom industry is the reason it can’t get investors. Before investing, the institutions want to see the tariffs rising, and that needs to happen soon. For the unaware, Vi has been trying to raise Rs 25,000 crore since the time board of the company approved the plan. The tariffs aren’t expected to rise soon anytime until Jio and Airtel push for it as well. Thus it might be some time until Vi can get investors if this is the actual reason.

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