Vodafone Idea is seeking additional time to make spectrum payments due to its high debt and weakening profitability, The Economic Times (ET) reported.
The Department of Telecommunications confirmed it is reviewing a request from the operator for a two-year moratorium, ET said. The operator needs to pay about INR100 billion ($1.4 billion) in spectrum fees this year alone.
A Vodafone Idea representative 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, creating 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.
Vodafone Idea, with a 36 per cent market share at end-December 2018, reported an after-tax loss of INR49.7 billion in its fiscal Q2 2019 ending 30 September. It is exploring raising up to INR250 billion in new capital.
While the market leader and Bharti Airtel suffered declining sales and profitability in 2018, third-ranked Reliance Jio made gains. In its fiscal Q3 (to end-December) its net profit jumped 65 per cent year-on-year to INR8.31 billion, with operating revenue of INR104 billion up 51 per cent.
It added 120 million mobile subscribers in 2018, ending the year with 280 million.