TIWN
New Delhi, Sep 9 (TIWN) Vodafone Idea's severe financial crisis may result in higher impact on the tower industry.
Emphasising that the government support is "critical" at this point, ICRA said the support can be in the form of deferment of spectrum dues, reduction in levies and reduction in interest rates "Vodafone Idea has been under financial stress as reflected by mounting losses and burgeoning debt levels, which is likely to impact its financial lenders as well as Government, apart from having a bearing on its employees, its subscribers and associated industries, most prominently towers," ICRA said in a statement. In the event of VIL exit, the tower industry may be confronted with the vacation of around 180,000 tenancies that the telco currently occupies. Of these, only 40-50 per cent of the tenancies are expected to be regained by the tower companies over 18-24 months.
The telecom industry had been facing headwinds since the launch of services by Reliance Jio Infocomm Limited (RJIL) which manifested into a decline in revenue and profit generation. Further, the Adjusted Gross Revenue (AGR) penalty added to the woes of the industry and have kept the debt levels elevated. Owing to the aforementioned reasons, the financial position of Vodafone Idea Limited (VIL) has been deteriorating due to mounting losses and increasing debt levels, the ICRA said.
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