Vodafone Idea eyes softer payment terms after Indus Towers warns of disrupting tower access

Following a board meeting held on Monday, Indus Towers’ board expressed concern about the mounting dues and non-payment from Vi. It wrote to the telco seeking immediate repayment of past dues and sought regular payment henceforth, the sources said.

The letter highlighted three main concerns. One is that the entire independent board was very upset with the long pending overdue that it wants to be cleared as soon as possible.

Also, the telecom operator has been paying only 40 to 50 percent of the overdue for the past few months. The board has insisted that Vi clear almost 80 to 90 percent of the due and from November, onwards make 100 percent payment to ensure Indus Towers continues to render its services.

Third, if Vi fails to clear the dues post-November, there is a clear threat of the services getting disrupted.

If the tower company stops towers' access to Vi, the services to over 255 million subscribers of the cash-strapped telco will be seriously hit. The warning comes as the company had made a doubtful debt provision of Rs 1,232.6 crore in the April to June quarter.

It is yet to be known if Vi’s promoter entities will be able to infuse fresh capital into the cash-strapped telco. Another concern for the firm is whether the government will convert the spectrum dues into equity. Until Vi promoters don’t infuse money, the government is reluctant to put in money and convert spectrum dues into equity.

Meanwhile, if Vi faces a service disruption from Indus Towers’ end post-November, it remains unclear what shall happen to its services.