India's third largest telecom service provider, Vodafone Idea Ltd IL), is struggling with a liquidity problem of such magnitude that it is inches away from bankruptcy. The fallout from such a collapse would be widespread, which will be felt by the company’s subscribers, employees, lenders, and the telecom sector as well. Without VIL, India’s telecom market, which once boasted of over a dozen operators, would be reduced to an effective duopoly.
But the biggest loser if VIL goes bust will be the government. Because not only will it have to deal with fixing a wounded sector and assuaging the battered confidence of foreign investors, it will also bear the brunt of the financial losses arising from such a collapse.
VIL’s slide into crisis
The genesis of VIL’s current troubles may be placed quite squarely on the outcome of the over 14-year-long adjusted gross revenue (AGR) case at the Supreme Court.
The matter revolved around the definition of aGR, based on which telcos pay their statutory dues to the government. The telcos argued that aGR should not include non-telecom revenue; the department of Telecommunications (doT) disagreed.
Eventually, in October 2019, the SC delivered a verdict favouring the government and directed telcos to pay up their pending aGR dues along with interest and penalties. According to the doT’s computations, this figure came out to a whopping ₹1.52 lakh crore, and the largest burdens fell on Vodafone Idea (₹58,000 crore) and Bharti airtel (₹43,000 crore). Reliance Jio, a late entrant, got away with a liability of just ₹191 crore.
after a series of appeals and petitions, telcos managed to get an extended 10-year payment schedule comprising annual instalments from the courts, but the sC has not budged on the amount that is due.
هذه القصة مأخوذة من طبعة August 08, 2021 من The New Indian Express Chennai.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 8500 مجلة وصحيفة.
بالفعل مشترك ? تسجيل الدخول
هذه القصة مأخوذة من طبعة August 08, 2021 من The New Indian Express Chennai.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 8500 مجلة وصحيفة.
بالفعل مشترك? تسجيل الدخول
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