Companies

Vodafone Idea remains hopeful of government support

Ayushi Kar Mumbai | Updated on September 07, 2021

Chairman says government recognises the need for healthy competition in the telecom sector

Vodafone Idea remains hopeful that the government will provide the ailing telco with the support necessary to survive the deep financial troubles that plague it. VIL Chairman, Himanshu Kapania, told shareholders that Vodafone Idea remains confident that the government recognises the need for healthy competition in the telecom sector.

“Your company believes the government recognises the criticality of the sector and the importance of retaining healthy competition amongst private sector operators. Your company’s robust wireless digital infrastructure covering a 1.2 billion population for mobile telecommunication services has played a key role in nation-building and is critical for the country’s Digital India Mission. As the industry continues to remain under unsustainable financial duress, your company is hopeful that the government will provide the necessary support to address all structural issues faced by the sector,” said Kapania in a letter to the shareholders.

Financial duress

Vodafone Idea has been in significant financial duress, unable to pay the mounting spectrum dues, adjusted gross revenue payments, and invest enough capex into the upcoming 5G roll-out as well as expansion of the 4G network. The company has warned that without the government’s help or some reprieve in payments, the company is likely to fold by 2022.

SC judgment

Vodafone Idea still awaits the Supreme Court’s judgment on the appeal filed on August 10 against the Supreme Court order which rejected the telco’s application to request the Department of Telecommunications to correct manifest/clerical/arithmetic errors in the computation of adjusted gross revenue demands. Kapadia said that VIL is disappointed with the verdict and will take further legal recourse.

Also see: Airtel may gain market share, accelerate industry consolidation

Experts believe that Vodafone Idea is in dire need of government support, with mounting dues of ₹1.9 lakh crore, of which ₹1 lakh crore is for deferred spectrum payments and ₹62,000 crore are AGR liability to the government.

Published on September 07, 2021

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