It's been over seven weeks since the auction for the?5G spectrum in India concluded on August 01, 2022. The mega auction would fetch the government the highest amount ever, at over Rs 1.5 trillion.?
But amidst the?telecom giants?like Airtel and Reliance Jio¡¯s preparation to roll out?5G?across the nation by?Diwali,?Vodafone Idea?is still facing trouble in finalising deals for 5G equipment supplies and tower tenancies with vendors. The vendors are asking the cash-strapped telecom provider to clear their 4G-related dues and provide advance payments for fresh contracts, people familiar with the matter said, as per the ET report.
Vodafone Idea collectively owes around?Rs 13,000 crore, including around Rs 3,000 crore to Finnish equipment supplier?Nokia?and up to Rs 1,000 crore to Sweden's Ericsson in 4G-network-related dues.
And that¡¯s not all. The telecom joint venture between the UK's Vodafone Group Plc. and India's Aditya Birla Group (ABG) also owes around Rs 7,000 crore to tower company Indus Towers and Rs 2,000 crore to American Tower Co. (ATC).
The loss-making operator's problems regarding dues are delaying its 5G launch plans, thus?leaving it vulnerable to further loss subscribers to stronger rivals like Reliance Jio?and Bharti Airtel, say experts.
Vodafone Idea is reportedly trying to raise Rs 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 Rs 14,956.2 crore in the June quarter of FY23.
At June's end, Vi's net debt was over Rs 1.98 lakh crore, with deferred spectrum payment dues of over Rs 1.16 lakh crore and debt from banks and financial institutions at Rs 15,200 crore. Its cash?and cash equivalents were reportedly at Rs. 860 crore.
Also Read:?Reliance Jio, Airtel &?Vodafone Idea?Giving Higher Salary Hikes
While Bharti Airtel and Reliance Jio are already gearing up to launch initial commercial 5G services by Diwali and?have spoken of expanding services across India in 18-24 months, Vodafone Idea hasn't announced?any such plans.
As per the ET report, equipment vendors have been asking Vodafone Idea to clear their 4G dues and have also asked for advanced payments for 5G radio procurement.
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," a person familiar with the matter said.
"Vodafone Idea 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.
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