Vodafone Idea currently owes Indus Towers nearly $1.2 billion, according to local press reports
Indian carrier Bharti Airte’sl Chairman Sunil Mittal urged rival operator Vodafone Idea to settle its debts with Indus Towers and said that the tower firm would not provide new services to the telco if it failed to pay, local press reported.
Mittal warned that Vodafone Idea won’t be able to use Indus’ 5G towers unless the payments are made.
Bharti Airtel is Indus’ largest shareholder, with a stake of 48.7%. Published reports stated that Vodafone Idea currently contributes around 40% of Indus’ overall revenue.
The reports also stated that Vodafone Idea currently owes Indus Towers nearly $1.2 billion.
“They [Vodafone Idea] will not get new services until they pay money. They have a lot of old dues which they need to pay up. They have raised money, now they should be able to pay up,” Mittal reportedly said.
“They are making routine payments after the Indus board took a decision to shut the sites if the money does not come … otherwise they were only paying 80%, and the remaining 20% was getting accumulated,” he added.
In 2022, Indus Towers had urged Vodafone Idea to pay its debts with the company stating that that the company could potentially lose access to the use of towers.
Vodafone Idea recently concluded its $2.16 billion follow-on public offer (FPO) and also raised about $648.5 million from 74 anchor investors. Vodafone Idea recently said it expects to use the equity and debt funding to deploy its 5G service across India within six to seven months of securing the funds; it was also seeking funds to bolster its 4G network and pay tower vendors.
Vodafone Idea’s chief executive Akshaya Moondra told local newspaper The Economic Times the telco would not use the proceeds of its FPO to pay debts with vendors.
“FPO proceeds will not be utilized to pay any promoter or promoter group entity. As such, only a maximum of around 17% of the FPO proceeds are for general corporate purposes. We will use it in the best interest of the business and that use could also be capex. Broadly, we hope to pay vendors with the cash flows that we generate from operations, over a period of time,” Moondra said.
Swedish vendor Ericsson recently confirmed that it was in discussions with Vodafone Idea with the aim of securing new orders for 4G and 5G equipment.
Recent reports stated that Vodafone Idea was also having talks with Finnish vendor Nokia. The telco additionally aims to expand its current 4G network to be in a better position to compete with rival telcos Bharti Airtel and Reliance Jio Infocomm, which have an extensive 4G and 5G coverage across India.
