Vodafone Idea’s financial stress to impact industry

Vodafone Idea’s severe financial crisis may result in a higher impact on the tower industry.

An ICRA report said that Vodafone Idea Ltd (VIL) has been under financial stress as reflected by mounting losses and burgeoning debt levels, which is likely to impact its financial lenders as well as the government, apart from having a bearing on its employees, its subscribers, and associated industries, most prominently towers.

“In case of VIL exit, the tower industry might be staring at the vacation of around 180,000 tenancies that VIL currently occupies. Of these, only 40-50 percent of the tenancies are expected to be regained by the tower companies over a period of 18-24 months,” it said.

Given the precarious position of the balance sheet of VIL, material external support might be necessary, ICRA said, adding that the support can be in the form of deferment of spectrum dues, reduction in levies, and reduction in interest rates, among others.

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