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Vodafone Idea 'still hanging by a thread' as India takes stake

Telecom swaps interest payment for equity share, highlighting cash flow strain

Vodafone Idea will let India's government hold 35.8% of the company instead of paying owed interest.   © Reuters

BENGALURU -- Vodafone Idea's decision to hand a one-third stake to India's government is not enough to secure the mobile phone company's future, analysts say, as questions remain about how it will shore up finances to compete with market leaders Airtel and Mukesh Ambani's Reliance Jio.

Vodafone Idea said on Tuesday it will let the government own 35.8% of the company instead of paying 160 billion rupees ($2.16 billion) in interest on accrued telecom spectrum fees and other dues.

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