Vodafone Idea is confident it will sign a financing deal with potential investors, backed by a federal government program that will bring much-needed relief to the indebted mobile operator, the CEO said on Wednesday.Vodafone Idea, with a net debt of 1.91 trillion yen ($25.86 billion) and other government taxes of 1.68 trillion yen, has repeatedly expressed fears of surviving without government support.
Investors waited to see if New Delhi would guarantee at least three players in the telecommunications sector and also wanted the money to be used for businesses rather than paying government fees, Vodafone Idea CEO Ravinder Takkar said in a video interview. "With this package all of those fears to some extent have been put aside," said Takkar, without specifying the names of investors the company was in talks with or a timeline for the fundraising.
"With this tremendous change our business plans will have to be updated, which means our funding requirements will also have to be updated."Prime Minister Narendra Modi's government last week approved an aid package for India's struggling telecommunications sector, including a four-year moratorium on antenna fees owed to the state.India's telecommunications industry struggled with the arrival of billionaire Mukesh Ambani's Reliance Jio in late 2016,
Triggering a price war that pushed some competitors out of the market and turned gains into losses.A Supreme Court ruling in late 2019 also added to the pain in the industry, which has netted telecommunications companies about $13 billion in prices.Recent government action is expected to alleviate some of this pain, encourage telecommunications companies to expand into the world's second largest mobile market by number of users, and revitalize Vodafone Idea.
Sources:- the live mint
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