Voda Idea requests easier payment terms from tower sellers

Vodafone Idea told the exchanges on Friday that the No. 3 carrier was in talks with the country’s largest tower provider following reports that the latter was considering revoking services if its dues were not paid.

“The company has been in discussions with Indus for more flexible payment terms, which are continuing, but have not yet been finalized. We would like to clarify that if an event occurs that warrants disclosure under the regulations of listing in SEBI, the company will duly notify the stock exchanges,” the promoted Aditya Birla Group company said.

A senior executive familiar with the developments said the carrier had asked for more time to pay and also sought the flexibility of paying in installments as well as the ability to negotiate lower energy costs in addition to rentals.

“Indus recently renegotiated its master service agreements with telecom operators, so Vodafone Idea may have gotten better terms, but they may have asked for more time,” a second executive said.

Another senior executive said that tower service providers were sitting on several months of dues and disconnecting towers in case dues were not paid would be detrimental to Vodafone Idea which continued to generate revenue from its operations.

“They can also request the surrender of more inactive sites without any exit fees,” the executive said, speaking on condition of anonymity.

Queries to Vodafone Idea did not elicit a response on Friday evening.

The discussions come at a time when the loss-making carrier has been asked to pay 80% of its dues for the current month and all of its dues on a monthly basis going forward, failing which access to the towers will be banned, according to an Economic Times report. The carrier’s contributions to Indus and American Tower Corp amount to more than ₹10,000 crore.

Indus announced a 66% drop in net profit over one year to ₹477 crores for the quarter ended June 2022, down 73.6% from the previous quarter. The decline was largely due to receivables owed to the company by one of its major customers, he said, without naming Vodafone Idea.

The carrier has not yet concluded its fundraising of more than ₹20,000 crore it needs to stay competitive in the Indian market where rivals such as Bharti Airtel and Reliance Jio have drawn up aggressive plans to launch 5G services. The two main operators have already signed suppliers of telecommunications equipment to be used for the deployment of 5G networks, but Vodafone Idea has not yet finalized the contracts.

“We are in talks with various vendors for 5G procurement (equipment), as well as with banks for financing agreements…once those two things are in place, we will take steps for 5G deployment “said Vodafone Idea CEO Akshaya Moondra. at the carrier’s 27th annual general meeting last month.