Vodafone Idea subscribers face blackout if telco doesn’t pay its dues to tower company

Lack of or the complete loss of network is a persistent problem for smartphone users across the country, and Vodafone subscribers are not an exception. A year after the telco came close to shutting down due to increasing debt, it has received hope from reports of the government planning to buy a 32 per cent stake in the company. But service might worsen for Vodafone Idea users, as one of its creditors Indus Towers has told the firm to pay up or face denial of service.

What does it mean for users?

This will result in a complete blackout for common Vodafone users, which have already dropped by another 1.6 million to 259.21 million in June. Indus Towers has sent a stern warning to Vodafone Idea, which owes Rs 7000 crore to the company crucial for its services to continue. Vodafone also owes another Rs 10,000 crore to American Tower Co, and is trying to raise Rs 20,000 crore from a combination of debt and equity sales, to reduce the stress.

Caught in a cycle of debt?

Vodafone along with other telcos had refused to pay annual gross revenue charges to the department of telecom in 2005, over errors in calculation. By the time the Supreme Court ruled against them in 2019, the penalty on dues and interest on it had piled up for 14 years. Without relief from Supreme Court on the amount, Airtel and Vodafone among others were left liable to pay Rs 1.56 lakh crore to DoT.

Since then Vodafone Idea has been struggling to stay afloat, and a refusal of service from Indus Towers might just prove to be the last straw. The company which operated more than 1.86 lakh towers in India as of June, is 47.76 per cent owned by Bharti Airtel, while Vodafone Plc has a 21 per cent stake in it. As of now, Vodafone Idea’s debt stands at Rs 1.98 lakh crore, of which 90 per cent is owed to the government as AGR dues worth Rs 1.16 lakh crore. Another Rs 15,200 crore is to be paid to banks and financial institutions.