Vodafone Idea Chairman Kumar Mangalam Birla said the telecom operator will be forced to shut operations if the government does not offer a fiscal package for the telecom sector.
“I think we can expect much more stimulus from the government because it is required for the sector to survive. If we weren’t getting anything, then I think, it is the end of the story for Vodafone Idea,” Kumar Mangalam Birla said while speaking at a media event in New Delhi on Friday. “It does not make sense to put good money after bad. We will shut shop,” he added.
Vodafone Idea, India’s leading telecom operator based on mobile phone subscribers, posted its biggest quarterly consolidated net loss of Rs 50,921.9 crore or $7.14 billion for the second quarter ended September 30 due to provisions for adjusted gross revenues (AGR).
The wireless carrier had posted a net loss of 49.74 billion rupees a year ago.
The company’s consolidated revenue from operations for the quarter rose 41.4 percent year-on-year to 108.44 billion rupees.
Vodafone Idea has provisioned Rs 25,677.9 crore for AGR payments, which is estimated at Rs 44,150 crore. This includes an estimated licence fee of Rs 27,610 crore and spectrum usage charges (SUC) of Rs 16,540 crore with penalty and interest for up to September 30, 2019.
The telecom operator has filed a review petition in the Supreme Court seeking a waiver of the interest and penalty amounts. The company and other operators recently increased tariffs by 40 percent, which will improve their EBITDA margins. In addition, the Centre has deferred the payment of spectrum dues for two years.
Vodafone Idea CEO Ravinder Takkar said in a statement earlier that the telecom company was in active talks with the government seeking financial relief after the SC ruling on AGR issue.
Vodafone CEO Nick Read said at a recent press round-table in London: “If you don’t get the remedies being suggested, the situation is critical.”
Nick Read said Vodafone was not committing any more equity to India and the country effectively contributed zero value to the company’s share price. As a result of the ruling, it has written down the value of its stake in the joint venture to zero.
Vodafone Group earlier said its future in India could be in doubt unless the government stopped hitting operators with higher taxes and charges, after a court judgment over license fees resulted in a 1.9 billion euro group loss in its first half.