Vodafone Idea Pays 5G Spectrum Instalment with Interest

The clearing of spectrum instalment dues is a positive sign for the investors and the government. But is it enough? Not nearly. Vi needs to improve the bottom-line revenues and that won't happen until there's a tariff hike.

Highlights

  • Vodafone Idea (Vi) has confirmed that it has paid its first instalment for the 5G spectrum it acquired in 2022.
  • The payment from the telco also included interest.
  • In an exchange listing, Vi said it paid Rs 1,701 crore to the Department of Telecommunications (DoT).

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Vodafone Idea (Vi) has confirmed that it has paid its first instalment for the 5G spectrum it acquired in 2022. The payment from the telco also included interest. In an exchange listing, Vi said it paid Rs 1,701 crore to the Department of Telecommunications (DoT).




"We wish to inform that the Company has today, i.e. 16th September, 2023, made the requisite payment of ~ Rs. 1,701 crores (including interest) to the Department of Telecommunications, Government of India, towards 2022 Spectrum Auction Instalment, in accordance with the terms of Notice Inviting Applications dated 15th June, 2022," Vi said in a statement.

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The telco's stock closed at Rs 11.70 on Friday. This figure is a 52-week high for the telco's share. The jump in stock price is due to speculation of raising funds in the near future. Vi has not been able to raise funds for several years and it has hurt the telco's chances to compete with the other private competitors in the market.

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The clearing of spectrum instalment dues is a positive sign for the investors and the government. But is it enough? Not nearly. Vi needs to improve the bottom-line revenues and that won't happen until there's a tariff hike. Setting up the infrastructure for telecom connectivity is super expensive and given the fast-paced 5G rollout by its competitors, Vi wouldn't like to be left behind for a long time.

The telco would require access to a significant amount of funds for a meaningful change in the market position. One of the promoters of Vi has promised an equity infusion of up to Rs 2000 crore in case the telco requires it to make short-term payments. There were reports that the telco is very close to raising funds but no development has come out of it so far.

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