The government is the biggest shareholder in the cash-strapped carrier with a 33.1% stake.
Payment moratorium ends in FY26
“Vi had reported verbally that it is in discussions with US International Development Finance Corporation (DFC) for funding Open-RAN & related technologies, but no progress has been reported even after lapse of four months,” the DoT said in a January 4 confidential report on Vi.
ET has seen a copy of DoT’s confidential report on the ailing telecom joint venture between the UK’s Vodafone Plc and India’s Aditya Birla Group.
The DFC is the US government’s development finance institution that invests in multiple sectors, including critical infrastructure, technology, energy and healthcare. It also partners with the private sector to finance solutions to critical challenges in the developing world.
“Discussions on funding are underway,” a Vi spokesperson said in a written response to ET’s queries. “As a listed company, we shall make disclosures at the appropriate time.”
Trials with Mavenir on
Earlier, Vi had told ET in November 2023 that Open-RAN (O-RAN) trials with US companies were being explored with an eye on deployment in the future. The telco has reportedly been holding trials with Mavenir for a 5G network based on O-RAN for a few circles and is in talks for equipment supply.
In its report, the DoT also underlined Vi’s mounting dues. It has estimated that after the telco’s four-year payment moratorium ends in FY26, Vi will face an annual regulatory liability of well over Rs 30,000 crore toward deferred spectrum dues of past auctions as well as annual instalments for past adjusted gross revenue (AGR)-related dues.
The DoT also said it has issued a show cause notice (SCN) to Vi as the cash-strapped telco has failed to clear pending licence fees (LF) and spectrum usage charges (SUC) for the September quarter, amounting to around Rs 700 crore, including interest, amid continuing liquidity challenges.
It added that Vi also needs to pay another ₹900 crore that was due January 15 toward LF and SUC dues for the December quarter, and an additional ₹163.5 crore annual instalment by March 2024 towards spectrum buys in the 2021 auction.
As per the note, the government has estimated that the loss-making telco will need to clear ₹2.34 lakh crore of auction-related dues by 2042. Further, it has estimated Vi will also need to clear Rs 1 lakh crore of AGR-related dues till FY19 payable between 2025 and 2031.
4G expansion, 5G rollout
Loss-making Vi has been struggling to raise funds for more than three years. It needs a large dose of capital quickly to pay the government, large vendors like Indus Towers, expand its 4G coverage and roll out its pending 5G network to compete effectively with bigger and financially stronger rivals, Reliance Jio Infocomm and Bharti Airtel.
The struggling carrier’s shares closed 3.78% higher at Rs 16.47 on the BSE on Monday.
In the September quarter earnings call, Vi’s chief executive Akshaya Moondra had told analysts that the telco expected to conclude its discussions related to funding from potential equity investors in the December quarter. He had added that Vi’s talks with banks had already taken place. The focus was on tying up equity investment, on the basis of which banks would process the telco’s demand for funding, he had said.
But ET had subsequently reported that Vi’s equity funding had been delayed and may close in the current March quarter.
Vi had ended the second quarter with Rs 2.12 lakh crore net debt and a cash balance of Rs 119.6 crore. Its dues to banks and financial institutions stood at Rs 7,860 crore at the end of September. As per the company’s books, existing debt payable by September 30, 2024, is Rs 7,174 crore.
Besides Indus, Vi needs to pay other vendors such as American Tower Corp (ATC), Nokia and Ericsson.
The government has in the past accommodated the company’s requests for delayed payments.
Currently, telcos pay 8% of their AGR as licence fees to the government. Vi’s quarterly SUC payout is estimated at just over 1% of AGR – down from 3-4% earlier – after the DoT stopped charging this statutory fee on airwaves bought from the July 2022 5G auction onwards.
