Indian operators in struggle to raise extra $12m debt
Indian operators in struggle to raise extra $12m debt for spectrum charges
14 January 2020 | Alan Burkitt-Gray
Vodafone’s Indian joint venture is to set aside 11% of its upcoming $3.5 million rights issue to help pay licence fees, spectrum usage charge, interest and penalties to the government.
The company is challenging a decision that could give it and its rivals, Bharti Airtel and Reliance Jio, an extra $13 million in debt between them.
The Supreme Court of India changed the way telcos calculate their spectrum usage charges – defined by a metric called adjusted gross revenue (AGR). That meant the three operators now have 920 million rupees ($13 million) extra debt.
The Department of Telecommunications (DoT) is wanting the sums to be paid in three months. Vodafone Idea is saying this sum threatens the company’s viability. The three have already started lobbying the government to reduce their burden. They are planning to challenge the Supreme Court’s AGR ruling.
Vodafone Idea was planning to raise 250 million rupees ($3.5 million) in a rights issue, but the company has decided to amend the terms because of a two-year moratorium on spectrum and other fees.
The total owed, according to Vodafone Idea’s adjusted gross revenues, is 530 million rupees ($7.4 million).
Vodafone Idea said in a statement: “The board of directors of the company has, by a resolution dated January 10, 2020, approved the modification to the objects of the rights issue.”
15h | Natalie Bannerman
16h | Jason McGee-Abe
17h | Natalie Bannerman
18h | Alan Burkitt-Gray