Vodafone Idea chairman Kumar Mangalam Birla warned the Indian operator would shut down if it doesn’t get government relief from large fees levied by a court relating to spectrum and usage charges, The Economic Times (ET) reported.
India’s second-largest operator by subscribers faces charges of INR400 billion ($5.6 billion) following a Supreme Court ruling over the definition of adjusted gross revenue (AGR). Vodafone Idea and Bharti Airtel slammed the decision, which burdens the industry with INR933 billion in additional licence and spectrum usage fees.
Speaking at a conference, Birla called for dialogue between Indian officials and its judiciary to agree a settlement for the nation’s troubled operators, but warned if these came to nought “I think it is the end of the story for Vodafone Idea”, ET reported.
He argued the telecoms sector was key to India’s digital goals, stating more relief from the government should be forthcoming as a result.
The impact of the AGR decision was felt by Vodafone Idea in its fiscal Q2, when an INR257 billion provision for the charges plunged it deeper into the red.
This also weighed on Vodafone Group earnings for the six months to end September, prompting CEO Nick Read to announce the company would look to end funding for the Indian joint venture.
There is some relief in the pipeline, though, with India’s government announcing it would defer operators’ spectrum payments for two years from April 2020, a move ET reported in a separate article could be worth up to INR420 billion.Subscribe to our daily newsletter Back