Voda Concept simply can not seem to catch a break

NEW DELHI: Vodafone Concept is believed to have put its recent 4G growth and modernisation plans on maintain to preserve cash to satisfy a late January deadline to pay up hundreds of crores in statutory dues, individuals acquainted with the matter mentioned.

The loss-making operator had earlier mentioned it might be compelled to close store if it doesn’t get any reduction from the federal government or the judiciary on its estimated Rs 53,000-crore dues to the federal government after the Supreme Courtroom in October upheld the telecom division’s definition adjusted gross revenues on the premise of which telcos pay their licence payment and different levies.

All of the 4 telecom tools distributors within the nation — Ericsson, Nokia, Huawei and ZTE — at the moment are involved over the restoration of their dues from Vodafone Concept, trade insiders mentioned.

“Whereas present orders are being fulfilled by the distributors, Vodafone Concept has put its new 4G growth plans for greenfield websites on different main technology-driven invest-ments on maintain,” an individual acquainted with the matter instructed ET.

Vodafone Concept performed down their considerations. “We’re engaged with our vendor companions on enterprise as normal foundation,” an organization spokesperson mentioned in an emailed assertion to ET.

Huawei, Nokia, Ericsson and ZTE didn’t reply to ET queries as of press time Thursday.

Some 15 telcos, together with Vodafone Concept, are observing extra authorities dues of over Rs 1.47 lakh crore, together with penalties. The Supreme Courtroom had in its October 24 order instructed them to make the funds inside three months.

Analysts mentioned it was pure for Vodafone Concept to take steps to preserve money. “Given the large AGR dues of VIL, it’s anticipated that they’ll put their (4G) growth and new technology-driven investments on maintain within the short-term and concentrate on nondiscretionary investments akin to integrating present networks of Vodafone and Concept,” mentioned Ashwinder Sethi, principal, consulting, at Analysys Mason.

Nevertheless, the choice could result in Vodafone Concept ceding extra subscriber and income market share to its rivals Bharti Airtel and Jio that have already got higher 4G protection.

As of June finish, Vodafone Concept had solely 175,881eNode–B, or 4G base transceiver stations (BTS) in place, whereas Airtel had 326,744 and Jio had 746,147, in keeping with the regulator’s information.

Airtel, which additionally faces AGR dues of over Rs 35,500 crore, has additionally slowed down its 4G growth, an trade insider mentioned.

However the firm denied any such transfer. “Airtel continues to develop its 4G and pre-5G know-how footprint,” a spokesperson mentioned.

The turmoil has left the gear distributors observing a good bleaker 2020-21after a foul 2019-20, with telcos curbing their capex spending.

Vodafone Concept had in late October mentioned it is going to slash capex spending for FY20 to Rs 13,000 crore from Rs 17,000 crore, citing financial savings from higher pricing, disaggregation of parts whereas ordering, and discount of deliberate 4G footprint in non-priority areas.

Airtel, too, had mentioned its capex in FY20 shall be lesser than FY19. The telco had reported 51% year-on-year fall in consolidated capex within the September quarter, which was additionally down sequentially.

The AGR woes have worsened the state of affairs of each Airtel and Vodafone Concept, in addition to these of substances distributors. “For the VIL integration, ZTE’s cost phrases had been essentially the most versatile,” mentioned an individual cited earlier. “For 3 years, they don’t seem to be asking extra money upfront.

However they are going to be in excessive strain now.”

Within the case of the opposite Chinese language vendor Huawei, most funds for wi-fi are made, the individual mentioned.

“Each ZTE and Huawei’s publicity elevated additional this yr because of the new wireline contract. Nevertheless, there isn’t any intentional delay but from VIL,” he mentioned.

One other individual mentioned European distributors Ericsson and Nokia had been already cautious about cost phrases, and so they could search speedy readability.