Vodafone Idea (Vi), the third-largest telecom operator in the country, has to clear past dues with Indus Towers to be able to roll out new services. Vi wants to launch 5G in the near future and will use the infrastructure of Indus Towers to offer it to customers. The telecom operator has recently raised funds from equity, and it will be able to pay off dues more comfortably now. According to an ET report, Sunil Bharti Mittal, Chairman of Bharti Enterprises, said that Vodafone Idea will not get any new services until they pay the money. Mittal said that they have a lot of old dues that they need to clear.
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For the unaware, Bharti Airtel is the largest stakeholder in Indus Towers (with a 48% stake). Airtel wants Vi to clear up the old dues before it can start offering new services to customers. Due to its inability to raise funds for a long time, the telco has not paid off the past dues to Indus.
In the past, Indus even threatened Vi to cut off its access to the mobile towers if it didn’t clear the payments in time. According to the report, Mittal said that the board of Indus will be flexible about the payments. If Vi pays off a substantial amount and then gives a schedule for the remaining amount, it will be considered by the tower company.
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At the same time, it is worth considering that Vi’s management has said that most of the funds raised are earmarked for capex and the revenues that they will generate will be used to pay off dues. Vi contributes about 40% of the revenues for Indus Towers.
The telco said during the earnings call that it plans to launch 5G in 6 months. So it will require the help of Indus Towers. Recently, Vi has been clearing the routine payments to Indus Towers. It is just the pending past dues, which the telco has to pay off.
