Vodafone Idea cleared the first instalment of dues pending for 5G spectrum, as per the telco’s exchange filing on Saturday. The telco confirmed that it has paid ₹1,701 crore to the Department of Telecommunications (including interest), “towards 2022 Spectrum Auction Installment, in accordance with the terms of notice inviting applications dated June 15, 2022.”
The payment of ₹1,680 crore was due on August 17, but the telco availed the 30-day grace period, to make the payment later with interest. In case the company was still unable to make the payment by September 17, the promoters were expected to put in ₹2,000 crore to make the payment, as the failure to pay dues on 5G spectrum would have led to the revocation of Vi’s bank guarantees.
It appears that Vi was able to collect funds to pay the dues without the promoters’ help. In the Q1FY24 quarterly reports, the management insinuated that further fundraising from promoters is expected, which will help them pay their dues to network vendors such as Nokia, Indus Towers etc.
Even though Vodafone Idea has cleared the first tranche of 5G payments, its liquidity problem persists, and the telco is taking a piecemeal approach to clear dues as they come — while necessary capital expenditure into their 4G and future 5G network remains non-existent.
Vi needs to clear another tranche of payments to the DoT by the end of this month. Vi owes the government ₹700 crore in statutory dues related to spectrum usage charge, and license fee payments for the April-June quarter. Vi has already paid the government 10 per cent of the amount due, a few weeks back. However it needs to clear the rest of the payments by the end of September with interest.
The Indian government owns a 33 per cent stake with the debt ridden operator, in hopes reviving the company. The DoT was delaying equity conversion, awaiting infusion of further funds from the promoters. While the promoters, Aditya Birla Group and Vodafone Plc, have committed to infusing more funds in the company, these plans have not materialised yet. Vodafone Idea is yet to raise funds from external investors as well. There were talks that Vodafone Idea is on verge of refinancing a ₹4,000 crore loan from the State Bank of India. However, those plans have also not materialised.