x
Asia

Financial problems may delay 5G for India's Vodafone Idea

India's third-largest service provider, Vodafone Idea, has yet to close 5G vendor deals because of its massive debt, according to media reports.

While Bharti Airtel and Reliance Jio have already announced 5G deals and plan to launch commercial services before Diwali (the festival of light) on October 24, Vodafone Idea has yet to make any such announcement.

Vodafone Idea's massive debt may result in a delayed 5G launch.
 (Source: Amlan Mathur/Alamy Stock Photo)
Vodafone Idea's massive debt may result in a delayed 5G launch.
(Source: Amlan Mathur/Alamy Stock Photo)

Reliance Jio and Bharti Airtel say 5G will be available across the country in another 18 to 24 months.

Overdue bills

Vendors are reluctant to sign new deals with Vodafone Idea because dues for 4G equipment are still pending.

It's been reported that the service provider owes 30 billion Indian rupees (US$368.48 million) to Nokia, INR10 billion ($122.8 million) to Ericsson, INR70 billion ($0.85 billion) to Indus Towers and INR20 billion ($245.6 million) to American Tower Company (ATC).

This puts Vodafone Idea in a vulnerable position, and it risks losing premium subscribers.


Want to know more? Sign up to get our dedicated newsletters direct to your inbox.


The company is already witnessing an erosion of its subscriber base – down from 271.9 million in July 2021 to 255.1 million in July 2022.

Vodafone Idea spent INR187.99 billion ($2.3 billion) to procure 6,228MHz of spectrum across the 1800MHz, 2100MHz, 2500MHz, 3300MHz and 26GHz frequency bands in a few priority circles (service areas).

The operator's chief executive officer, Akshay Mundra, recently said the company would finalize 5G launch plans when it procures bank loans. Vodafone Idea has been trying to procure investment for several years but hasn't been successful.

Media reports say the Ministry of Finance has cleared the proposal to convert part of the adjusted gross revenue (AGR) owed to the government into equity, making them a majority stakeholder with a 33% stake in the company. This is likely to make investors wary.

Related posts:

— Gagandeep Kaur, contributing editor, special to Light Reading

Be the first to post a comment regarding this story.
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE