Vodafone Idea (Vi) is confident about its future in India as well as 5G services. This is because of the reforms that the government recently announced. Because of the moratorium on dues announced, it has become possible for Vi to work on its networks for now and not get pressured because of the statutory dues in its books. As per a PTI report, the telco’s non-executive chairman, Himanshu Kapania, Vi, will be able to invest in new technology and services, including 5G, because of the recent reforms.
Kapania didn’t fail to mention that 5G investments would only follow when the ecosystem is ready, and the spectrum pricing has been made affordable.
Vodafone Idea Guaranteed to Stay in The Market
Even though the company is losing subscribers for consecutive months, there’s one thing that the reforms have ensured - survival of Vodafone Idea in the long run. While the telco still has a lot of dues, the government will give an option to reduce it by giving up some part of the equity. This way, either the telco can pay off the dues in cash, or the government can take some part of the company. In either of the scenarios, the telco is guaranteed to survive.
Vodafone Idea had a gross debt of Rs 1.91 lakh crores, not due as of June 30, 2021. What’s worth noting here is that out of the total debt, Rs 1.06 lakh crores was due for spectrum payments, and over Rs 62,180 crores were due for adjusted gross revenue (AGR) liabilities.
Since the company wasn’t cash flow positive, it would have just been impossible for it to pay all of this debt without declaring bankruptcy at some point in the future. But because of the reforms announced in mid-September, one thing has become clear, Vodafone Idea is here to stay. It promotes healthy competition in the market and just adds to the overall innovation in the sector.