SC agreeing to hear DoT’s rescue plan is good news for Vodafone Idea: BoFA report

Our Bureau Mumbai | Updated on March 18, 2020 Published on March 18, 2020

The Supreme Court agreeing to consider the government’s rescue plan for telecom sector in its next hearing is good for Vodafone Idea Ltd (VIL), according to a report by BoFA Securities.

“Given the fact that the Supreme Court is going to hear the government's rescue plan after two weeks, we believe there remains hope for VIL (if the court agrees to the Government's plan). From Bharti's perspective, they have to pay higher than initial expectations on AGR dues. We think even in this environment Bharti should be able to manage it,” it said on Wednesday.

“In our view the government will wait for the apex court’s decision after two weeks. Based on the decision, it could look in to further relief. For instance, the government could potentially create a telco fund (as suggested in the media) and give cash to affected telcos to pay to court immediately and over time get the telcos to repay at a soft interest rate,” it added.

The brokerage firm also said that it thinks VIL's ability to invest in capex will go down helping both Bharti Airtel and Reliance Industries (Reliance Jio Infocomm) to capitalise in terms of market share. It also expects to see a faster pace and magnitude of tariff hikes.

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Published on March 18, 2020
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