Vodafone Idea calls for moratorium on spectrum payments

21 Jan 2019

Indian cellco Vodafone Idea has requested a two-year moratorium on spectrum payments due to its high debt levels, the Economic Times writes, citing a senior government official. The operator is reportedly expected to pay around INR100 billion (USD1.4 billion) in fees related to its spectrum holdings this year. According to the unnamed source, the request is being considered by the Department of Telecommunications (DoT) and other ministries and departments. Vodafone Idea’s appeal reiterates similar submissions made by the industry in recent years – including filings in November and December last year from the Cellular Operators Association of India (COAI) and Associated Chambers of Commerce and Industry of India (ASSOCHAM), respectively – as intense price competition has negatively impacted service revenues whilst spectrum prices have remained consistently high. The Economic Times cites industry bodies as stating that the sector has lost 42% of its quarterly sales revenue between April-June 2016 and July-September 2018. The debt pile for four cellcos, meanwhile, was said to total around INR5 trillion, 60% of which was attributed to spectrum payment obligations.