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India's support to telecom industry unlikely to sustain Vodafone Idea

Pile of debt, cash crunch could scupper mobile phone operator in long term

India's debt-laden telecom industry has been seeking a relief package from the government.   © Reuters

MUMBAI (NewsRise) -- India's recent relief measures for the telecom industry may help cash-strapped Vodafone Idea survive in the near term, but billions of dollars of debt and a stretched balance sheet make its long-term prospects bleak.

On Monday, India's telecommunications department approached the Supreme Court seeking a relaxation of timeline for wireless operators to repay their penalties and levies. The government has offered a 20-year payment window to the companies to pay their dues in adjusted gross revenue, according to a top government official. It even plans to waive off the interest on penalties.

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