“The government must in some way facilitate the survival of Vodafone Idea as a third competitor …consumers will be at a disadvantage with only two players left in the game if VIL were to close down,” Jindal tweeted Friday. He marked the Prime Minister’s Office and the finance ministry in his tweet.
If VIL shuts down, the telecom sector will reduce to just two private carriers — Reliance Jio and Bharti Airtel — from three currently.
Jindal’s tweet came a day after VIL widened its net loss sequentially to Rs 25,460 crore for the June quarter — its eighth successive three-month period in the red — hurt by a one-time charge related to statutory AGR dues and continued customer losses, upwards of 11 million. VIL shares had plunged 7.5% in intra-day trade, and eventually recovered lost ground, up 7.15 % at Rs 8.84 in late Friday afternoon trade on BSE.
The telecom joint venture between UK’s Vodafone Group and the Aditya Birla group has reiterated about the continued threat to its viability, which, it said, is dependent on the period the Supreme Court allows it to pay thousands of crores in adjusted gross revenue (AGR) related dues and being able to renegotiate repayment terms with lenders.
VIL has taken a one-time charge of Rs 19,440 crore to provide for its balance AGR dues, in addition to estimated “recognised liability” of Rs 46,000 crore as on March 31. It needs to pay around Rs 50,400 crore more to the telecom department in licence fee, spectrum usage charges (SUC), interest and penalties. The top court has reserved its order on whether telcos will be allowed to stagger their payments and, if yes, the timeframe over which they can do so. Vodafone Idea, along with Bharti Airtel, have sought 15 years to pay up.
VIL’s chairman Kumar Mangalam Birla has previously warned the loss-making telco would be forced to shut shop if no government relief is forthcoming on its AGR-linked statutory dues. It is hit hardest by the Supreme Court verdict that had backed the government’s wider definition of AGR.