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Vi’s quagmire to close deal for 5G equipment grows as vendors seek advance payment

New Delhi: Vodafone Idea (Vi) is facing problems closing deals for 5G equipment because suppliers want the telco to pay off past debts first. The contracts for 5G equipment rentals and supplies have also run into trouble since the vendors want upfront payments, according to a report in the Economic Times (ET).

“Equipment vendors have been asking the telco to clear their 4G dues and have also asked for advanced payments for 5G radio procurement,” a person aware of the matter was quoted as saying in the ET report.

Vi also owes Rs 1,000 crore to Ericsson, Rs 3,000 crore to Nokia, Rs 7,000 crore to Indus Towers, and Rs 2,000 crore to American Tower Company, according to the report.

If 5G is launched later than expected, the corporation may suffer more subscriber losses. Before Diwali, Bharti Airtel and Reliance Jio said they would introduce 5G in India. Such plans have not been made public by Vi.

In June, the company’s net debt exceeded Rs 1.98 trillion. 1.16 trillion rupees are owed for unpaid spectrum fees out of this total. The amount due to banks and other financial institutions is about Rs 15,200 crore.

According to the ET article, Vi is hoping to raise Rs 20,000 crore, but so yet has not been successful in closing any deals. The corporation has delayed its ambitions to introduce 5G.

An expert claimed that Vi’s sluggish 5G rollouts could cause significant customer churn, especially among its premium post-paid subscribers, who might switch to competitors in order to use 5G.

The report also said that the telco’s subscriber base decreased by 1.54 million in July to 255.1 million.

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