Vodafone Idea offers to settle Rs 1,500-cr Nokia dues in tranches by end-2025: Report

The joint venture between the UK's Vodafone Plc and the Aditya Birla Group recently secured around Rs 23,000 crore in equity financing.

Beleaguered telecom service provider Vodafone Idea (Vi) has proposed a plan to settle its remaining legacy operational dues to Finland's Nokia, amounting to approximately Rs 1,500 crore, through multiple cash instalments by December 2025, sources told The Economic Times. However, the Finnish vendor has not yet accepted the proposal, reported the daily.

The telecom company recently allocated 1,027 million equity shares to Nokia through a preferential issue, clearing about half of its dues, roughly Rs 1,520 crore. Following this share allocation, Nokia Solutions and Networks India, Nokia's local unit, now holds a 1.47 percent stake in Vi, according to the telco's latest shareholding structure filing on July 19.

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Before the preferential share issue, Vi's total dues to Nokia stood at Rs 3,000 crore (approximately Rs 300 million). Nokia's Q2 earnings report indicated that the financial impact of Vi's recent equity share allotment would reflect in its Q3 results.

Both Nokia and Vi have not responded to queries from The Economic Times as of Sunday. Moneycontrol has not independently verified the report.

Despite delays in clearing the vendor dues, Vi's senior management remains confident that operational creditors, including Nokia, will continue to support the company. This confidence stems from the critical nature of Vi's upcoming 4G network expansion and 5G rollouts for European network vendors Nokia and Ericsson. These vendors have been experiencing significant revenue declines due to India's leading telecom operators Reliance Jio and Bharti Airtel, reducing their FY25 network capital expenditures after completing their nationwide 5G rollouts.

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Murthy GVAS, Vi's chief financial officer, assured analysts at JP Morgan last month that vendor negotiations would remain unaffected by payment issues. The telecom company has been in talks with Nokia, Ericsson, and Samsung to purchase equipment for its 4G network expansion and 5G service rollout.

The joint venture between the UK's Vodafone Plc and the Aditya Birla Group recently secured around Rs 23,000 crore in equity financing. Vi is now seeking to raise an additional Rs 23,000-25,000 crore through term loans from an SBI-led banking consortium and to arrange another Rs 10,000 crore via non-fund-based facilities.