Amid delays in clearing dues, Vodafone Idea confident of support from operational creditors
Vodafone Idea (Vi) is confident its operational creditors, including network gear makers Nokia and Ericsson and tower vendor Indus will continue to support it despite delays in clearing their dues as the telco’s upcoming 4G-cum-5G blitz will generate fresh business for them.
“Vendor negotiations shouldn’t impact, despite payment issues. With (our) peers’ post-5G capex peak, equipment vendors potentially see Vi as the primary source of growth, making their support likely in addition to the recent preference shares issued for part dues,” Vi’s CFO Murthy GVAS told global brokerage J P Morgan at a recent meeting.
Global brokerage J P Morgan also quoted Vi’s Murthy saying that even for Indus, which has “a high proportion of single-tenant towers recently rolled out for LTE coverage, Vi offers a profitable second tenancy and loading revenues that should keep the terms of trade in the telco’s favour”.
Bharti Airtel chairman Sunil Mittal had recently told ET that Vi must clear all of Indus’ past dues, failing which, the struggling telco won’t be allowed to use the tower company’s infrastructure for any new services such as 5G.
Over the next three years, Vi plans to pump in Rs 55,000 crore of capex for beefing up its 4G coverage and rolling out 5G networks in its priority markets. This is expected to garner fresh business for its network and tower vendors, especially since India’s top two telcos, Reliance Jio and Bharti Airtel have completed their pan-India 5G rollouts and are expected to cut network capex spends in FY25.
