Vodafone Idea (Vi) again stands to risk losing access to its mobile towers. Indus Towers might cut the access of Vodafone idea from its mobile towers if the dues aren't cleared, said a CNBC-TV18 report. The telco needs to make advance payments to the vendor to keep its access to the towers. Back in 2022, Indus Towers had given a strong warning to Vi to clear the dues or risk losing access to the mobile towers. Now, the same threat is looming back. Indus Towers' board is all set to meet on Jan 24, 2023 and results of that meeting would be very important for Vi.
Lenders Don't Want to Issue Fresh Loans
Lenders don't want to issue fresh loans to the company because Vi might just use it to clear debt instead of funding network expansion. The telco owes close to Rs 7000 crore to the Indus Towers and had agreed to clear the amount by July 2023.
If Vi loses tower access from Indus Towers, it would be detrimental for the company's business as millions of customers of the telco would be impacted. It would basically derail Vi completely.
The telco is in a super tight spot and the government is not moving ahead with the equity conversion. The govt wants the promoters to infuse additional capital into the company and also wants Vi to come up with a new business plan which includes 5G rollout details before it goes ahead with the debt to equity conversion.
Vodafone Idea has not been able to reduce losses and the company has been continuously losing subscribers. The telco isn't in a position to pay off its debts as well as fund network expansion until and unless it gets funds from the investors. But until the time the govt converts equity and more clarity comes in that regard, the outside investors won't pitch in capital.