“Vodafone Idea Seeks 30-Day Extension for ₹1,680 Crore Spectrum Payment Amid Financial Challenges”
In the midst of financial challenges, Vodafone Idea, a major telecom player in India, has sought a 30-day extension to pay approximately ₹1,680 crore for a spectrum auction instalment that was due on Thursday. The move comes as the company grapples with mounting debt and seeks additional time to manage its financial obligations.
In the midst of financial challenges, Vodafone Idea, a major telecom player in India, has sought a 30-day extension to pay approximately ₹1,680 crore for a spectrum auction instalment that was due on Thursday. The move comes as the company grapples with mounting debt and seeks additional time to manage its financial obligations.
The debt-ridden telecom operator aims to avail the grace period, as allowed by the terms of the Notice Inviting Applications (NIA), and pay the amount with interest. According to Murthy GVAS, the Chief Financial Officer of Vodafone Idea, the company has submitted a letter to the Department of Telecommunications (DoT) outlining their intention to pay the spectrum auction instalments within the stipulated 30-day grace period, along with the associated interest.
This development comes despite one of the company’s promoters confirming their commitment to provide financial support, either directly or indirectly, up to ₹2,000 crore to meet any fund requirements for impending payment obligations.
The telecom operator has been actively engaging in efforts to secure funding and stabilize its financial position. Vodafone Idea recently acquired 5G spectrum in both mid-band (3300 megahertz) and millimeter wave in the 26 GHz band during the spectrum auction held in July 2022.
During a call, Akshaya Moondra, the CEO of Vodafone Idea, highlighted the ongoing discussions with investors and banks, expressing optimism that funding arrangements will be concluded in the coming quarter. Moondra emphasized that while one of the promoters has provided assurance of ₹2,000 crore for payments, external funding remains a necessity.
Vodafone Idea’s consolidated net loss widened to ₹7,840 crore in the first quarter of the fiscal year that ended on June 30. The company’s efforts to address the decline in its subscriber base include expanding its 4G coverage and investing in 5G technology.
As part of its financial strategy, Vodafone Idea plans to unwind its accumulation of vendor payments, which is expected to begin in the next quarter. Moondra noted that the current mobile service rates need to reflect usage more accurately, suggesting that tiered pricing based on data usage could help balance revenues.
The telecom operator’s average revenue per user (ARPU), a key metric in the industry, increased to ₹139 during the June quarter compared to ₹128 a year ago. Moondra indicated that a more tiered ARPU structure could better align with users’ data consumption patterns, promoting sustainable growth for the company.
The extension request for the spectrum auction payment underscores the company’s efforts to navigate its financial challenges and strengthen its position in a competitive telecom market.
Sources By Agencies
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