Vodafone Idea owes around ₹3,000 crore to Finnish equipment supplier Nokia and up to ₹1,000 crore to Sweden’s Ericsson in 4G-network-related dues. The telecom joint venture between UK’s Vodafone Group Plc. and India’s Aditya Birla Group (ABG) also owes around ₹7,000 crore to tower company Indus Towers and ₹2,000 crore to American Tower Co. (ATC).
Queries sent to Vi, ATC, Nokia didn’t elicit any response. Ericsson and Indus Towers declined comment.
The loss-making operator’s problems are delaying its 5G launch plans, leaving it vulnerable to further subscriber losses to stronger rivals Reliance Jio and Bharti Airtel, say experts.
Vi Yet to Announce Launch Plan for 5G
Bharti Airtel and Reliance Jio have already firmed up their plans to launch initial commercial 5G services by Diwali and spoken of expanding services across India in 18-24 months. Vi hasn’t announced any such plans.
“Equipment vendors have been asking the telco to clear their 4G dues and have also asked for advanced payments for 5G radio procurement,” one of the people told ET.
Similarly, tower companies are also being cautious because of the existing dues. “They want clarity (on clearing previous dues) before they consider new tenancies on their towers for the telco’s 5G services,” another person said.
“Vi too isn’t pushing too much to close the deals since it has been unable to close any funding arrangements till now,” another executive from a leading telecom vendor said.
Recently, Vodafone Idea’s new chief executive officer Akshaya Moondra told shareholders that the telco’s 5G launch plans will be finalised only after it lines up fresh bank loans and seals network gear procurement contracts.
The telco has been trying to raise ₹20,000 crore, split between more debt from lenders and equity, but hasn’t been able to conclude any deals so far. Its trade payables jumped almost 13.6% sequentially to ₹14,956.2 crore in the June quarter of FY23. At June end, Vi’s net debt was over ₹1.98 lakh crore, with deferred spectrum payment dues at over ₹1.16 lakh crore and debt from banks and financial institutions at ₹15,200 crore. Its cash and cash equivalents were at ₹860 crore.
“Unlike Jio and Airtel, Vi has been slow in terms of rolling out 5G contracts to vendors. Also, the vendors themselves have been apprehensive due to Vi’s financial troubles,” Ashwinder Sethi, Principal at Analysys Mason, told ET.
He said slow 5G rollouts by Vi may lead to further churn of its customer base, especially the premium post-paid subscribers who may move to competitors to experience 5G.
The telco’s user base shrank by another 1.54 millon in July to 255.1 million, according to the sector regulator.
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