Vodafone Idea pays 10% of the statutory dues this quarter

4 Sep 2023 , 03:14 PM

According to news reports, Vodafone Idea has paid about 10% of the statutory dues it owed to the department of telecom (DoT) for the April-June quarter and has agreed to pay the balance by the end of September.

It is believed that the struggling telecom operator has a payment burden of about Rs 700 crore towards the statutory dues, which comprise licence fee and spectrum usage costs. The company is currently saddled with a total debt of Rs 2.1 lakh crore and is still suffering from crushing losses.

‘Vodafone Idea gave us 10% and promised to pay the remaining amount by the end of September. This will also need paying interest for the delayed payment. Given that they did the same in the prior quarters, we are optimistic that the corporation would adhere to the timeline, a source told TOI.

Despite showing improvements in some areas, such as average revenue per user (Arpu) – a crucial metric to measure the profitability of mobile operators – as well as growth in the number of 4G subscribers, Vodafone Idea still struggles with financial instability and significant obligations for future payments.

The two main promoters, Aditya Birla Group and Vodafone Plc of the UK, have given the DoT numerous pledges, but have yet to inject equity into the company. The government currently owns a nearly 33% ownership in the company in lieu of future interest payments.

‘Since the government does not meddle in the day-to-day management of the business, we remain optimistic that the corporation is working on solid plans for a turnaround. In addition to bringing in crucial ‘mega funding’ through debt or bank loan funding or other financial partners, we are urgently waiting for the promoters to contribute more equity, the source added.

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