NEW DELHI: In a major setback to Vodafone Idea Limited (VIL), Indus Tower has said it could restrict its services for Vodafone Idea as the latter has defaulted on its payments, causing it serious financial constraints and landing it in a precarious situation.
The tower company, in a letter dated October 3, 2023, to the Telecom Regulatory Authority of India (TRAI), said: “In case of Vi continuing to breach its payment obligations, Indus will not only have recourse to all lawful remedies but also be entitled to mitigate its losses by restricting its services for Vi.” The letter has been written by Indus managing director Prachur Sah. Vodafone Idea owes Rs 7,864.5 crore (inclusive of interest) as of September 30, 2023 to Indus Tower. As per the letter, due to inability of Vodafone Idea to make payments, Indus Towers couldn’t declare dividends to its shareholders for the first time since its listing.
“The company has been pursuing payments since early 2022 and even made a one-time settlement agreement with VIL in February 2022 as a gesture of goodwill. However, despite this, Vodafone Idea has persistently defaulted on payments, breaching agreements, reads the letter. In September 2022, Vodafone Idea committed to making timely and complete payments towards the overdue amount, including interest, from January to July 2023, with a minimum committed amount of Rs 500 crore each month.
Meanwhile, Vi cleared dues of Rs 1,0701 crore to the Department of Telecom (DoT) with regard to the 2022 spectrum auction instalment. The company’s total gross debt (excluding lease liabilities and including interest accrued but not due) as of June 30, 2023, stood at Rs 2,11,760 crore. Vi has been trying to raise funds from the market for the past few years but failed to get any.