No New Payment Plan From Vodafone Idea, Situation Dynamic: Indus Towers

Indus Towers said on Wednesday that it has received no new proposal for an updated payment plan from Vodafone India (Vi), and asserted that the situation remains dynamic.

While payments for January have yet to be made, Indus Towers has received a 'significant part' of the instalment-based payments from Vi for the October-December period, the senior management said in a post results investor call.

A day before, the tower company had announced making a Rs 2,298.1 crore provision for doubtful debt against receivables from the telecom operator in the third quarter of FY23.

Vi had earlier submitted a payment plan to pay a large part of its billed amount till December, and clear the balance between January and July 2023. This had been approved by Indus Tower's board.

This came after Indus Towers, which is reported to have received payments of over Rs 7,500 crore from Vi, did not consider a proposal by the latter to issue OCDs and clear dues, similar to the Rs 1,600 crore OCDs it issued to American Tower Corporation.

Indus Towers now finds itself in a position where Vi is also racking up a large amount of interest on its late payments. Also, most of the receivables are unsecured, the company said.

Faith in payments

On when the company would issue an ultimatum for Vi to pay up, or begin legal proceedings against it, Indus Towers management said it remains committed to working with Vi to resolve the issue.

"We are working closely to understand the scale of the customer's financial difficulties. Our actions would be based on the payments as they come," a senior Indus Towers executive said.

It has now been over a year that receivables from Vi had been piling up.

Indus Towers had to make a Rs 1,770.9 crore provision for doubtful debt in Q2 of FY23 as well.

The company had, in October 2022, asked Vi to pay its dues by November or face disconnection of towers.

In response to an analyst query on Wednesday, the Indus Towers management said all telecom firms had agreed to its higher payment plan, and that one customer's financial trouble isn't likely to impact receivables from others.

Hoping to rebound

Indus Towers posted a net loss of Rs 708 crore in the third quarter of FY23, on a total revenue of Rs 6,765 crore. It had made a net profit of Rs 872 crore in the previous quarter on a revenue of Rs 7,967 crore.

Indus Towers is India’s leading provider of passive telecom infrastructure and deploys, owns and manages telecom towers and communication structures for various mobile operators. Company executives said its market share currently stands at 53 per cent for all new builds.

They added that business is expected to rebound given the push for 5G, and the continued push by telecom operators to augment 4G services.

"Operators are still trying to set up more than 90 per cent sites for 4G. Because of handset penetration, 4G business is not slowing down anytime soon," a senior conpany official said.

Its portfolio of over 189,392 telecom towers makes it one of the largest tower infrastructure providers in the country with presence in all 22 telecom circles.

The company has also significantly raised capital expenditure, which is expected to bear revenue growth with a lag, another official said.

Indus Tower speak

• Indus Towers committed to working with Vi to resolve the issue
• Future payments to guide actions on Vi
• Most of the receivables are unsecured
• Continuing push for 4G rivalling 5G biz
• Capex boost to bear revenue growth with lag
• Market share at 53% for new builds