NEW DELHI: British telecom major Vodafone Plc on Thursday quashed rumours that it was considering an exit from its India joint venture Vodafone Idea Ltd (VIL), stating the reports were “unfounded and baseless”.
“We would like to categorically state that this is not true and is malicious. Vodafone is actively engaging with government and we are fully supportive of our local management as they continue to manage our joint venture in these challenging times,” it said in an emailed response to TNIE.
VIL stands liable to pay Rs 40,000 crore in dues, penalties and interest to the Indian government after the Supreme Court upheld the telecom department’s definition of Adjusted Gross Revenue. Based on this, the SC had directed telcos to pay dues worth Rs 92,640 crore within three months, of which VIL stands to shell out Rs 28,308 crore.
An additional demand of Spectrum Usage Charge (SUC) to the tune of Rs 41,000 crore is also likely on the sector.
With VIL’s financial health particularly poor, brokerages have even raised the bogey of insolvency if the firm fails to get relief.
The judgement has sent incumbent telcos VIL and Bharti Airtel running to the government seeking succour, with the Cellular Operators Association of India stating in a letter to telecom minister Ravi Shankar Prasad that this could lead to an unprecedented crisis for two of the three private telecom operators and even lead to monopoly. The other private telecom player, Reliance Jio, who only stands to shell out Rs 13-14 crore, has opposed this, stating that these operators have the “capacity and enough monetisation possibility to comfortably pay government dues”.
The Centre, however, has formed a Committee of Secretaries to look into possible relief measures including deferment of SUC fees for two years and cutting of USOF charges.