Vodafone Idea has paid dues worth Rs 1,500 crore, comprising revenue share licence fee and spectrum usage charges, to the department of telecommunications (DoT).
This includes, around Rs 720 crore which were pending for the January-March quarter. The balance is the full payment for the April-June period. These are concurrent dues, which are not covered by the four-year moratorium.
This is for the first time in recent years, that the company has paid the statutory quarterly bills raised by DoT in full and on time.
An email query sent to Vodafone Idea did not elicit any response till the time of going to the press.
The regularisation of payments come as the company in April raised Rs 18,000 crore via follow-on public offering (FPO). Besides, one of the promoter entity — Aditya Birla Group (ABG) — also infused Rs 2,075 crore equity into the company.
The company has also paid the first installment of Rs 346 crore for the spectrum acquired in the June auctions. Besides, it has also started clearing past dues of vendors such as Indus Towers.
At the end of the March quarter, Vodafone Idea’s gross debt (excluding lease liabilities and including interest accrued but not due) was at 2.16 trillion. The gross debt comprises deferred spectrum payment obligations of Rs 1.3 trillion, adjusted gross revenue (AGR) liabilities of Rs 70,320 crore that are due to the government, debt from banks and financial institutions of Rs 4,212 crore and optionally convertible debentures amounting to Rs 160 crore.
The company has also engaged with a consortium of banks for debt funding of about Rs Rs 25,000 crore and additional non-fund-based facilities of up to Rs 10,000 crore.
Even as the company has been clearing its concurrent dues, the company would require further deferral or conversion of the dues to equity from the government, according to analysts.
This because once the moratorium on payment of AGR and spectrum dues ends in September 2025, the company will need to pay Rs 29,100 crore by the end of March 2026 to the government and Rs 43,000 crore annually from FY27 onwards till FY31.
The company’s liability may get reduced by up to 50% in case of a positive verdict on the AGR dues case, analysts said.Last month, the Supreme Court agreed to hear a curative petition by Vodafone Idea seeking correction of alleged errors in AGR.
“The management (of Vodafone Idea) is optimistic about a favourable outcome in the AGR case and believes the government remains supportive. The potential reduction in dues, if the curative petition is successful, could be Rs 30,000-35,000 crore,” brokerage house Citi said in a recent note.
Lately, Vodafone Idea also reached out to DoT seeking waiver on financial bank guarantee worth Rs 25,000 crore that is required to be submitted for spectrum payment due in September 2025.
The payment is for spectrum purchased before 2022 auctions. Officials said the bank guarantee needs to be deposited one year before the expiry of the moratorium period. The government, however, is yet to take a call on whether it would be waiving off the bank guarantee requirement for the company, sources said.In a bid to expand its 4G network and launch 5G, the company is planning to incur a capital expenditure of Rs 50,000-55,000 crore over the next three years, on the back of recent equity fundraise and proposed bank funding.
Vodafone Idea’s net loss for the January-March quarter expanded to Rs 7,674 crore from Rs 6,986 crore in the preceding quarter. The losses expanded owing to fall in revenues and base effect of the preceding quarter where the company recorded a one-time gain of Rs 755.5 crore.
Revenue from operations during the period fell 0.6% q-o-q to Rs 10,607 crore. On a year-on-year basis, the revenue rose 0.7%.The company lost 2.6 million mobile subscribers, taking its user base to 212.6 million at the end of March.