Vi facing troubles in finalising 5G deals, vendors want advance payment

Vi owes Rs 1,000 cr to Ericsson, Rs 3,000 cr to Nokia, Rs 7,000 cr to Indus Towers, and Rs 2,000 cr to American Tower Company (ATC)

Vodafone Idea (Vi) is facing difficulties in finalising deals for 5G equipment as vendors are asking the telco to clear previous dues first. The deals for 5G equipment supplies and tower tenancies have also hit a roadblock with vendors demanding advance payments, a report in Economic Times (ET) added.

"Equipment vendors have been asking the telco to clear their 4G dues and have also asked for advanced payments for 5G radio procurement," a person aware of the matter was quoted as saying in the ET report.  

The report further said that Vi owes Rs 1,000 crore to Ericsson, Rs 3,000 crore to Nokia, Rs 7,000 crore to Indus Towers, and Rs 2,000 crore to American Tower Company.

A delay in the launch of 5G may leave the company vulnerable to higher subscriber losses. Bharti Airtel and Reliance Jio have already announced that they would launch 5G in India before Diwali. Vi has not announced any such plans. 

The company's net debt was above Rs 1.98 trillion in June. Out of this, Rs 1.16 trillion are deferred dues for spectrum payments. Around Rs 15,200 crore are owed to banks and financial institutions. 

The ET report added that Vi is aiming to raise Rs 20,000 crore, but has not been able to conclude any deals so far. It has postponed the company's plans to launch 5G.  

An expert said that slow 5G rollouts by Vi may lead to a further churn in its customer base, especially the premium post-paid subscribers, who could switch to competitors to experience 5G. 

The telco's user base fell 1.54 million in July to 255.1 million, the report added.