The beleaguered telecom giant Vodafone Idea is ailing with unpaid dues of hefty amounts and the condition looks grim for the sustenance of the company.
According to recent reports, if Vodafone Idea fails to raise its unpaid dues and make the payment by early next year, it could have to shut down. This comes even after the government intervened to roll out programmes targeted specifically at saving the debt-laden Indian telecom sector.
Here’s everything you need to know about how deep in the muddy waters Vodafone Idea already is.
Vodafone Idea Reportedly Has Gotten an Ultimatum
The debt-laden telecom major Vodafone Idea, with parent companies as the UK telecom giant Vodafone PLC and the cement-to-telecom conglomerate Aditya Birla Group could shut down as a company if it fails to pay its pending dues on adjusted gross revenue or AGRs by Feb 2023.
Some latest reports have pointed that Vodafone Idea’s dues on AGRs has been pending for over 20 years, and it has now been warned that if it fails to get required funds by Feb 2023, the telco might have to shut down its operations.
This comes at a time when the telco has been losing subscribers left, right and centre and is struggling to generate funds.
The telecom major’s parent organizations had earlier infused money in it when the government had announced a revival plan for the Indian telecom sector.
As per the programme, Vi and Bharti Airtel had opted to pay the AGR dues through 6 installments in a four-year moratorium.
While the private telco Airtel has already made payments of four installments before the targeted date, Vodafone Idea had announced to sell 32% of its equity stake to the government through conversion to make up for the pending dues.
However, the government has now instructed the telco that it will only proceed with the acquisition of Vi’s equity stake if it rolls out the 5G service, which its competitors Reliance Jio and Bharti Airtel already have.