Indus Towers, India’s largest telecom tower company, has posted a net loss of Rs 708 crore in Q3 FY23. A year ago, during the same quarter, the company posted a net profit of Rs 1,571 crore. This loss during this quarter has come because Indus decided to make a Rs 2,298.1 crore provision of doubtful debt as Vodafone Idea’s funding plans remain muted. Vi, one of the largest customers of Indus Towers, has not been in a financially sound position to pay off the dues. Vi has been trying to raise funds for a long time, but nothing has materialised. On its quarterly earnings statement, Indus said that Vi had indicated challenges in complying with higher payments in the future.
In the fiscal second quarter, Indus had provisioned Rs 1770.9 crore as doubtful debt because of Vi’s situation. The telco owes the tower company about Rs 7500 crore. Vi’s monthly dues are upwards of Rs 300 crore to the Indus Towers. In late 2022, Vi had promised Indus Towers that it would start making full payments of the current dues from January 2023. Along with that, the telco said that whatever dues it had pending till December 31, 2022, it would also clear that in the first seven months of 2023.
Indus Towers had given a strong-worded warning to Vi that if it didn’t pay off its dues, the telco’s tower access would be cut off. Most of Vi’s towers are supplied by Indus Towers, and thus if Indus doesn’t allow Vi to access the towers, it would mean big troubles for the telco and its customers. This would also hurt Bharti Airtel, a major stakeholder in the tower company. Airtel wants Vi to do well so that the telco can pay off its dues to Indus Towers.
There were reports that Airtel is ready to give away its right of first refusal if Vodafone wants to sell its remaining stake in Indus Towers so that it could provide the funds to Vi.