Vodafone Idea (Vi), the third-largest telecom operator in the country, has clarified its position with Indus Towers, a local telecom infrastructure company. On Wednesday, the exchange had asked the telco to give clarification over the report - 'Clear Dues or lost tower access: Indus Towers to Vodafone Idea', which appeared on ET.
On Thursday, the telco said that it is in discussion with Indus Towers Limited for softer payment terms. The discussions are ongoing and haven't concluded yet, said Vi.
For the unaware, the ET report said that Indus had written a strongly worded letter to Vodafone Idea, asking the telco to clear its dues or lose access to the towers. Vodafone Idea has time till November 2022 to clear the dues, or else Indus will cut the telco's access to the towers. This is a grave warning for Vi's investors and its customers. If the telco is restricted access to the towers, its millions of customers would be affected. That could be fatal for the business in the short term.
According to industry sources, Vodafone Idea owes around Rs 6800 crore to the Indus Towers. But then there are other vendors as well to which Vi needs to pay. To Ericsson, Vi owes Rs 400 crore, Rs 2400 crore to ATC (American Tower Company), and over Rs 3000 crore to Nokia. Vodafone Idea would need to pay the dues or else convince Indus Towers to go for softer payment terms.
But the issue is, because of the delays that Vodafone Idea has caused in making the payments to Indus Towers, the trade receivables of Indus stood at Rs 6249 crore. November is not far, and it would be interesting to see what happens.
Much recently, Vodafone Idea paid the State Bank of India (SBI) Rs 2700 crore in advance. This move was to win the trust of the lenders and the banks so that the telco could clear its funding for procuring 5G equipment. The equipment vendors wouldn't be too excited to give Vodafone Idea telecom gear for 5G in credit, given the telco's precarious position.