Tower Companies Might Lose 1.8 lakh Tenancies If Vi Collapses: Here's How

Vodafone-Idea is facing troubles due to the financial crisis. Also, the rules and regulations are affecting the business of the telecom operator. Vodafone-Idea is behind all telecom operators as it has to pay Rs. 1.9 lakh crore of dues.

"In a scenario of Vi's collapse, tower companies will lose around 1,80,000 tenancies that the company occupies, and of these, only 40-50 percent of the tenancies (are likely) to be regained by tower firms while the balance would be lost owing to redundancies and network realignment," Sabyasachi Majumdar, group head & senior Vice President, ICRA, said.

The firm said that the total tenancies of the towers are expected to remain less and if Vodafone-Idea did not manage to survive, then the number of telecom operators will be reduced to two, such as Reliance Jio and Airtel.

Telecom Towers Of Vodafone-Idea: Check All Details Here

He said that India's third-largest telecom operator Vodafone-Idea has a 35 percent tenancy share and 36 percent revenue share in the towers. The research firm also highlighted that in the case Vi shuts down its operations, then tower companies will bear the loss of these tenancies. But in that case, Vodafone-Idea customers have to move to other telecom players.

However, one should not forget that the government is working on measures and might soon announce some measures for the telecom sector.

"The most effective relief can come in the form of extension of the moratorium on spectrum dues beyond FY2022, which can result in deferment of dues payable in FY2023 to the tune of Rs. 32,000 crores for the industry of which Rs. 16,000 crores are for VIL. Moreover, reduction in the levies paid by telcos, namely license fee, and spectrum usage charges can also lift the EBITDA," Ankit Jain, Sector Head & Assistant Vice President, ICRA.

Furthermore, the firm said that a 1 percent reduction in levies might allow annual savings up to Rs. 1,600 crores to the industry. Apart from these measures, reducing interest rates on dues and launching floor pricing is expected to increase the average revenue per user translates into Rs. 450-500 crores.