Vi’s quagmire in closing a deal for 5G equipment is growing as vendors require upfront payment


New Delhi: Vodafone Idea (Vi) is struggling to secure deals for 5G equipment because suppliers want the telecom company to pay off old debts first. Contracts for the rental and delivery of 5G equipment have also run into trouble as providers require upfront payments, according to an Economic Times (ET) report.

“Equipment providers have asked the telecom company to pay their 4G fees and have also requested upfront payment for procurement of 5G radios,” a person familiar with the matter was quoted as saying in the ET report.

According to the report, Vi Ericsson also owes Rs 1 trillion, Nokia Rs 3 trillion, Indus Towers Rs 7 trillion and American Tower Company Rs 2 trillion.

If 5G rolls out later than expected, the company could suffer more subscriber losses. Ahead of Diwali, Bharti Airtel and Reliance Jio said they would roll out 5G in India. Such plans were not published by Vi.

In June, the company’s net debt exceeded 1.98 trillion rupees. Of this, Rs 1.16 trillion is owed for unpaid spectrum fees. The amount owed to banks and other financial institutions is around Rs 15,200 crore.

According to the ET article, Vi hopes to raise Rs 20,000 crore but has yet to secure any deals. The group has delayed its ambitions to roll out 5G.

One expert claimed that Vi’s sluggish 5G rollouts could result in significant customer churn, particularly among its premium postpaid subscribers, who may switch to competitors to embrace 5G.

The report also said the telecom company’s subscriber base fell by 1.54 million to 255.1 million in July.

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