Vodafone Idea is aggressively opting for cost-cutting measures to reduce the financial pressure. The telco is believed to let go nearly 1,500 to 2,000 permanent employees across different levels to ensure financial stability. Also, Vodafone Idea has reduced its telecom circles from 22 to 10 for better operational and managerial efficiency. As reported by ET Telecom, telecom gear vendors such as Huawei, ZTE, Nokia and Ericsson are delaying new orders of 4G equipment from Vodafone Idea due to fear of not receiving payments as the telco is already under heavy financial distress. Due to non-availability of telecom equipment, Vodafone Idea is facing trouble in expansion plans which are leading to more subscriber losses.
Vodafone Idea Not Getting Bank Guarantees
Vodafone Idea is facing difficulty in paying employees salaries and meet operating expenses. Mukul Rohatgi, who represented Vodafone Idea, addressed the supreme bench and stated that the telco could not secure bank guarantees as it is under heavy financial distress. However, European telecom gear vendors such as Ericsson and Nokia are seeking bank guarantees against new orders which they have received in previous orders.
As of Chinese telecom gear vendors, Huawei and ZTE have flexible payments terms. But the vendors are sceptical about the ability of Vodafone Idea to clear pending payments which is resulting in delayed delivery of new equipment. As per industry estimates, Vodafone Idea has to clear around Rs 3,500 crore and Rs 4,000 crore cumulatively for telecom equipment supplies. Chinese telecom gear vendor Huawei stated that the company support Vodafone Idea for their world’s largest integration and capacity. However, an unknown senior official has addressed that there have been payment delays from Vodafone Idea.
Vodafone Idea Needs New Equipment for Capacity Expansion
Vodafone Idea is aggressively looking out for new equipment and technologies for capacity expansion as the telco is being vulnerable to subscribers losses due to delayed delivery of equipment. The telco is focusing on OpenRAN technology vendors to solve the situation with traditional vendors and enjoy cost benefits.