According to Himanshu Kapania, Non-Executive Chairman of Vodafone Idea NSE -3.36 percent (Vi), the government’s recent telecom reforms will allow the company to invest in new technology and services, including 5G, when the ecosystem is ready. A four-year moratorium on government dues, according to Kapania, will help Prime Minister Narendra Modi’s vision of Digital India while also providing immediate financial relief to operators.
Following the announcement of a series of telecom reforms in mid-September, the government is now encouraging more investment in the sector. A four-year moratorium on all future government payments provides immediate relief.
Vodafone Idea will be able to expand its 4G coverage and capacity while also providing deeper rural connectivity as a result of a four-year moratorium on all government dues, including spectrum liability and AGR dues, as a result of a recent Supreme Court order.”
“When the ecosystem is ready and spectrum is affordable,” Kapania said, “the brand will be able to invest in new technologies and services, such as 5G.”
Vi owed Rs.1.91 lakh crore
Vi owed Rs. 1.91 lakh crore as of June 30, 2021, excluding lease liabilities and accrued but unpaid interest. Deferred spectrum payment obligations of Rs. 1.06 lakh crore, an AGR liability of Rs. 62,180 crore, and debts to banks and financial institutions of Rs. 23,400 crore are among the amounts owed.
In the fiscal year April-June 2021, the company generated a consolidated revenue of Rs 9,152.3 crore, with a finance cost of Rs 5,228.4 crore.
Kapania, a new member of the company’s board, believes that government reforms will aid in the resolution of some long-standing issues in the sector. In August, he succeeded Kumar Mangalam Birla. They will assist telecommunications companies in managing their free cash flows and providing them with investable funds for long-term digital infrastructure development via new capex investments.
“With this landmark decision on telecom structural reforms, the government has truly demonstrated their commitment to establishing a healthy market structure of at least three private players,” Kapania said.
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