Vodafone Idea (Vi) needs to pay off its past dues to Indus Towers or it won’t be allowed to use the tower company’s infrastructure for new services like 5G, according to Bharti Airtel chairman Sunil Mittal. Airtel owns about 48% of Indus Towers. Mittal emphasized that Vi should pay the old dues since they’ve raised funds recently.
Mittal mentioned that if Vi pays a substantial amount and sets a schedule for the remaining dues, Indus Towers’ board might consider being flexible. The aim is to increase business and tenancies for Indus.
Ambit Capital estimates Vi’s past dues to Indus at around ₹10,000 crore. Vi is crucial to Indus as it generates about 40% of the tower company’s revenue. Recently, Vi raised ₹18,000 crore and plans to secure an additional ₹25,000 crore debt to fund its 4G and 5G expansion.
Vi aims to roll out 5G services in the next 5-6 months and is in talks with vendors like Ericsson and Nokia for equipment. Purchase orders are expected soon. Vi has been making routine payments to Indus over the past year and cleared some past dues in the last quarter.
Despite some payments, Indus Towers’ trade receivables rose to ₹6,450 crore in Q4FY24. Vi’s CEO Akshaya Moondra said FPO proceeds wouldn’t be used to clear promoter-related dues and didn’t specify a timeline for settling dues with Indus. However, Vi management indicated they aim to clear all vendor dues this fiscal year and plans significant network upgrades to compete with Airtel and Jio. Vi has lost market share since its 2018 merger due to lower network investments.
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