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Vodafone Idea pays Rs 1,701 crore as second annual spectrum instalment for 5G

Vodafone Idea experienced a loss of 4.5 million mobile subscribers, and falls to 221.4 million by the end of June 2023. The company also saw a slight increase in blended subscriber churn, which rose to 3.9%, compared to 3.8% in the previous April-June period.

Saumya Nigam Written By: Saumya Nigam @snigam04 New Delhi Updated on: September 18, 2023 12:54 IST
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Image Source : VODAFONE Vodafone Idea pays Rs. 1,701 crore as second annual spectrum instalment for 5G

Vodafone Idea, a known telecom company in India has made a significant payment of Rs?1,701 crore as the second annual spectrum instalment towards its 5G spectrum acquisition from the Department of Telecommunications (DoT). This payment follows the acquisition of 5G spectrum worth Rs?18,799 crore in the previous year's 5G auction. The company had chosen to clear its 5G spectrum dues to the government in 20 equal instalments. In the previous year, it paid the first instalment of Rs?1,680 crore.

In August of this year, Vodafone Idea requested a 30-day grace period from the DoT to settle the second spectrum instalment. According to government auction rules, a 15% interest rate is levied in case of delayed spectrum payments.

Notably, Vodafone Idea is currently the only telecom operator in India that has not yet launched its 5G services. The company's decision to opt for an instalment-based payment scheme aligns with its financial considerations and the evolving dynamics of the Indian telecom market.

Furthermore, Vodafone Idea recently disclosed that it had received communication from a promoter group entity indicating its commitment to provide direct or indirect financial support of up to Rs?2,000 crore in the event of any fund requirement for meeting the company's impending payment obligations. However, the company did not specify whether it has already received this committed funding support.

In terms of financial performance, Vodafone Idea reported a net loss of Rs?7,840 crore for the April-June quarter, which widened from the Rs?6,419 crore loss in the preceding quarter. Despite challenges, the company's revenue from operations increased by 1.2% quarter-on-quarter to reach Rs?10,655.5 crore.

During the same quarter, Vodafone Idea experienced a loss of 4.5 million mobile subscribers, bringing its subscriber base to 221.4 million by the end of June. The company also saw a slight increase in blended subscriber churn, which rose to 3.9%, compared to 3.8% in the previous April-June period. These figures indicate the competitive nature of the Indian telecom sector and the need for operators to navigate it strategically.

The payment of the second instalment for the 5G spectrum reflects Vodafone Idea's ongoing commitment to fulfilling its financial obligations and maintaining a competitive presence in the Indian telecom market.

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