Vodafone-Idea Might Sell Its Fixed-Line Broadband Business: Here's Why

Vi (Vodafone-Idea) is likely to sell its fixed-line broadband subsidiary along with data centers to reduce its debt. The telecom operator is expected to raise $1 billion (Rs. 7,400 crores) from the sale of the same business.

Vodafone-Idea Debt Details

The telecom operator needs to clear Rs. 22,500 crores of dues by April 2022. Vi needs to clear adjusted gross revenue, spectrum dues, and other debt by the end of this financial year.

Notably, the company is trying its best to raise Rs. 25,000 crores via ADR, FCCB, GDR, and warrants. The telecom operator has been struggling to raise money after having several rounds of discussions with potential investors.

Vodafone-Idea Plans To Sell Broadband Business

"Vi is expecting between $800 million and $1 billion (from the broadband, optic fiber, and data center sales), but investors are not very keen at these price points," an investment banker said.

In addition, Akshaya Moondra, the chief financial officer of Vi, said that the telco wants to generate extra Rs. 3,000 crores in the financial year via tax refunds and selling of data centers.

"The valuation would hinge on the tenure of lease arrangement that Vi enters with the potential buyer and how much it pays as monthly rentals towards lease charges," the person added.

For the unaware, Vi has data centers in Mumbai and 160,000 Km of optic fiber. You Broadband is a subsidiary of the telecom operator, which was acquired from TRG Capital. The company invested Rs. 400 crores in the internet firm. You Broadband is providing its services in 21 cities and has 3,000 Km optic fiber.

Vi earlier tried to sell its fiber and data center business but did not get through the deal due to valuation issues.

However, now the situation has been changed and it wants to sell the business desperately so that it can clear all dues and operate in the country easily. It is worth noting that India's third-largest telecom operator Vodafone-Idea is losing subscribers and market share due to growing competition in the industry, which is why it is selling its fbre and data business.