Typography

Indian operator Vodafone Idea has requested additional time in its bid to make spectrum repayments, after its debts continued to proliferate and its profitability weakened due to market demands.

The Indian telco market is one of the most challenging and competitive globally. The introduction of Reliance Jio in September 2016 has squeezed margins for a number of India’s traditional major players in the ICT ecosystem.

The Department of Telecommunications has confirmed following speculation in local media that it is currently reviewing a request from the operator for a two-year moratorium. A report in the Economic Times said that the operator needed to repay about INR100bn ($1.4bn) in spectrum fees this year alone.

A Vodafone Idea spokesman told ET, “The telecoms industry is critical to fulfilling the digital aspirations of 1.3 billion Indians. Hence, it is important for it to be financially robust with multiple operators that can offer choice to citizens, ensure healthy competition and that national assets like spectrum are valued correctly.”

In late August 2018 Vodafone India and Idea Cellular completed their long-awaited merger which in turn created the nation’s largest mobile operator in the process. Since 2010, the companies participated separately in five spectrum auctions. Vodafone India spent a total of INR793 billion while Idea invested INR636 billion, the newspaper said.

In contrast, Vodafone Idea, with a 36 per cent market share at end-December 2018, has reported an after-tax loss of INR49.7 billion in its fiscal Q2 2019 ending 30 September. It is exploring the option of raising INR250 billion for capital expenditure for future investments in new growth areas and emerging industry verticals.