Vodafone Idea (Vi), the third-largest telecom operator in India, has reportedly prepaid Rs 2700 crore to the State Bank of India (SBI). This is to get the confidence of the lenders back as the telco needs urgent funding for 5G equipment deals. According to an ET Telecom report, Vodafone Idea is in a hurry to get fresh funds via debt. The government isn't fast-tracking the equity conversion process of the accrued interest dues of Vi into equity for itself. Till the time government doesn't complete its part in getting equity in the company, the telco won't be able to get fresh funding from outside investors.
Vodafone Idea's trade payables during the June quarter were Rs 14,956.2 crore, a rise of 13.6% sequentially. These trade payables include things such as dues to network vendors and tower firms.
Vodafone Idea Owes Most to Nokia amongst Vendors
When it comes to just vendors, Vodafone Idea owes the most amount of money to Nokia. The telco also owes money to Ericsson and Huawei. Amongst the tower firms, the telco's major debt lies with ATC and Indus. According to the publication's report, Vi's net debt stood at Rs 1.98 lakh crore.
Prepaying the loan amount to SBI could be a confidence booster. To roll out 5G while at the same time continuing to expand 4G across India, Vi would need access to fresh capital fast.
Akshaya Moondra, the new CEO of Vodafone Idea, had recently told the shareholders of the company that Vi is in talks for funding from several banks. Only once the funds are arranged from these banks can Vi actually give a firm update on the timeline of the 5G rollout. Airtel and Jio have already said that they would soon start rolling out 5G and, in the next few years, would also complete PAN-India 5G network coverage.
