Vi quantifies the annual outgo post lifting of spectrum, AGR moratorium

Vodafone Idea will have to pay a sum of Rs 41,300 crore annually from October 2025 once the four-year moratorium on spectrum ends. The moratorium on AGR dues will end in March 2026.

This was the first instance that the management quantified the outgo once the moratorium period is lifted. The clarification was made on the company’s earnings call.

Vodafone Idea had opted for the four-year moratorium offered by the government as part of its relief package for the telecom sector in October 2021. Options were offered to defer payments of spectrum auction installments due up to four years, excluding the one for 2021.

Over the last 12 months, Vodafone Idea has reported revenue worth Rs 41,884 crore with an operating profit of Rs 17,225 crore.

Vodafone Idea’s net loss for the December quarter widened to Rs 7,990 crore. from Rs 7,595 crore during the September quarter. Revenue remained flat at around Rs 10,600 crore, while operating profit margin expanded by 80 basis points sequentially.

Vodafone Idea’s net debt increased to Rs 2.27 lakh crore from Rs 2.2 lakh crore in the September quarter. Debt worth over Rs 8,032 crore will have to be repaid by the end of this year. The company stated that it remains engaged with lenders for further debt fund raising as well as with other parties for equity or equity linked fund raising.

Brokerage firm IIFL Securities said that the company has gone past the first hurdle in a “long obstacle course.” However, it has warned that unless Vodafone Idea manages to more than double its revenue over the next three years, making these payments will be very difficult.

Nomura has maintained its reduce rating and cut its price target to Rs 5 from Rs 8 earlier. The brokerage said that Vodafone Idea’s reluctance to raise the price of entry-level plans points to a lack of confidence of the companies retaining its subscribers. CNBCTV18