Vodafone Idea seeks 30-day extension for ₹1,680 cr spectrum payment amid financial strain

In the midst of financial turbulence, Vodafone Idea has reached out to the Department of Telecommunications (DoT) for an additional 30 days to settle a spectrum auction installment worth approximately ₹1,680 crore, originally due on August 17. The company intends to include interest in the payment as well.

Chief Financial Officer of Vodafone Idea, Murthy GVAS, revealed that the request was made in accordance with the terms of the Notice Inviting Applications (NIA), and the company is seeking to leverage the grace period offered by the DoT.

The move comes despite one of the company's promoters having committed to extending financial support of up to ₹2,000 crore to address impending payment obligations.

Earlier this year, Vodafone Idea secured a 5G spectrum during the July 2022 auction, acquiring both mid-band (3300 megahertz) and millimeter wave frequencies in the 26 GHz band.

In discussions with investors and banks, Chief Executive Officer Akshaya Moondra expressed optimism about closing funding deals in the upcoming quarter.

While the company's financial statement for the first quarter ending June 30 indicated a net loss of ₹7,840 crore, there was a marginal increase of 2.3% in consolidated revenue from operations.

Vodafone Idea's financial landscape reflects a gross debt of ₹2,11,760 cr as of June 30, 2023, with deferred spectrum payment obligations accounting for ₹1,33,740 cr and Adjusted Gross Revenue (AGR) liabilities of ₹66,860 crore due to the government.

Additionally, the company holds debt from banks and financial institutions amounting to ₹9,500 crore and has raised funds through debt instruments totaling ₹1,660 crore.

The net debt stands at ₹2,11,510 crore, with cash and cash equivalents of ₹250 crore.

The telecom provider has experienced a decline in its subscriber base, which contracted from 24 cr to 22.14 cr in the past year. To counter this trend, CEO Moondra emphasized the necessity of expanding 4G coverage and investing in 5G technology.

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