Is It End Of The Road For Vodafone Idea? SC Denies Relief, Asks Them To Pay Rs 54,000 Cr Dues

Vodafone Idea, the company which was born out of the merger between British telecom giant Vodafone and Aditya Birla Group-owned Idea Cellular is one of the few telecom operators left in the country.

But we could soon see the company exiting the market which is increasingly becoming a monopoly.

This comes after the Telecom Department began issuing orders, asking firms such as Bharti Airtel and Vodafone Idea to clear past dues immediately.

The Supreme Court had asked companies to clear dues, totalling an estimated Rs 1.47 lakh crore, before the next date of hearing on March 17.

A total of 15 entities owe the government Rs 1.47 lakh crore, out of which Rs 92,642 crore is in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges.

AFP

Airtel responded to DoT order by offering to pay Rs 10,000 crore by February 20 and the remaining before March 17. Airtel owes nearly Rs 35,586 crore, including licence fee and spectrum usage charge, to the government.

Earlier, the DoT had put on hold recovery of dues from telecom companies, started issuing circle or zone-wise demand notices to firms.

There was no word from Vodafone Idea, whose chairman Kumar Mangalam Birla had last month stated that the company will fold if it is forced to make payment of over Rs 53,000 crore dues.

"We will have to shut shop," Birla had said in December when he was asked about the course of action for the company going ahead in the absence of government relief. Birla indicated that his group will not invest any money in the company in the absence of relief from the government. "There is no sense that good money should follow bad money," he said. Birla said the company will have to opt for an insolvency route in the absence of relief.

AFP

On Friday, Birla had met telecom minister Ravi Shankar Prasad and discussed the consequences of the Supreme Court¡¯s verdict.

The possible exit of Vodafone Idea will leave India with just two private telecom operators - Mukesh Ambani-owned Reliance Jio and Sunil Mittal's Bharti Airtel.

With the state-run BSNL/ MTNL facing an uncertain future, the telecom sector in India is becoming an ever-shrinking space.

This is a far cry from nearly a decade ago when the telecom market was flooded with small, regional operators, who focused on a few telecom circles.

Uninor, Aircel, Docomo, Tata Indicom, Videocon, Spice, Virgin, Reliance Telecom, MTS, BPL Telecom, Ecotel are among the several telecom companies that had come and gone in a short span.

The dirt-cheap calling and data charges, which are some of the lowest in the world meant that many of the players in the once crowded India telecom industry could not sustain in the long-run and they all fell one-by-one either exiting the industry or merging with others.