Vodafone Idea (Vi) has cleared all of its dues related to license fees to the government. According to an ET Telecom report, a person close to the matter said that the company has paid complete dues with interest to the Department of Telecommunications (DoT).
The DoT had issued a show-cause notice to the telco asking reasons for why it did not clear dues related to license fees during the last quarter of FY2020-21 for seven circles of India. The concerned circles were - Jammu and Kashmir, Kerala, UP East, Odisha, Maharashtra, Bihar, and Gujarat. The telco had also skipped on paying the national long-distance license fees to the department.
Vodafone Said It Would Pay On April 15
The telco had issued a statement saying that any payment that is not made on March 25 is made on April 15 with interest. Vi has followed up with its statement and cleared all the dues to the government.
The telco had said that payment of licensee fee is a regular exercise, and it is paid after assessing the revenues for the quarter. Experts believe that the recent behaviour of Vi just shows how stressed the telco financially is.
Vi had tried to raise billions of dollars via an issue of convertible instruments, but that didn’t work. The telco’s attempt to get money from KKR did not bring anything either. Vi needs to increase the tariffs, but it has been unable to do that because of competitive pressure.
The telco needs to strengthen its 4G services in the 16 priority circles to compete with Reliance Jio and Bharti Airtel. Vi has already lost a ton of subscribers to Bharti Airtel, and the telco’s woes just seem to be never-ending. On top of this, it has to pay the government thousands of crores in adjusted gross revenue (AGR) dues.
According to the last report released by the Telecom Regulatory Authority of India (Trai), Vi had lost 2.3 million users while other operators gained 2 million (Jio) and 5.9 million (Airtel) users, respectively.
Things don’t seem to be getting good for Vi anytime soon if the industry doesn’t follow up with a tariff hike.