INSUBCONTINENT EXCLUSIVE:
Kumar Mangalam Birla said Vodafone Idea will have to opt for insolvency route in the absence of relief.Vodafone Idea, India's third
largest mobile service provider, will shut down if the government does not provide relief on the liability it faces in past statutory dues
following a Supreme Court order, its billionaire chairman Kumar Mangalam Birla said on Friday."If we we are not getting anything then I
Idea in absence of a government relief on payment of dues worth Rs 53,038 crore.Mr Birla's Idea Cellular and British telecom giant
Vodafone's India unit had merged last year to compete with the onslaught of free voice calling and dirt cheap data unleashed by
billionaire Mukesh Ambani's Reliance Jio.In the process, Vodafone Idea accumulated a debt of Rs 1.17 lakh crore
It posted corporate India's biggest quarterly loss after it provisioned for the payment to the Department of Telecommunications, following
the Supreme Court upholding the government's position in the adjusted gross revenue (AGR) matter."It does not make sense to put good money
That would be end of story for us
We will shut shop," he said in a response when asked if Vodafone Idea will put in more money.Market leader Bharti Airtel, Vodafone Idea and
other telecom players have to pay as much as Rs 1.47 lakh crore in payment of telecom license fee and spectrum usage charges together with
interest and penalty for past 14 years.Both Airtel and Vodafone Idea have petitioned the government for relief in waiver of interest and
penalty, which will halve the dues, and also filed a review petition in the Supreme Court.Mr Birla was however hopeful of a relief from the
government not just for the telecom sector but the industry as a whole to pull out the economy from a more than six-year low GDP growth of
4.5 per cent."They (the government) have realised the fact that this (telecom) is a very critical sector
The whole digital india programme rests on this
This is a strategic sector," he said.The government, he said, has publicly stated that it wants three players from the private sector and
one player from the public sector."I think that we can expect much more stimulus from the government because it is required for the sector
If we weren't getting anything then I think it is end of story for Vodafone Idea," he said.The government had late last month deferred by
two years the payment due to telecom companies for spectrum they bought in past auctions
This relief totalled Rs 44,000 crore for the industry but companies are expected to pay this due together with interest after the two year
moratorium.Asked about the specific relief sought, Mr Birla said, "The big elephant in the room is AGR
Which is actually I think something which lies in the court of judiciary
I believe government can have a dialogue
This was a suit filed by the government against telecom service providers."AGR refers to adjusted gross revenues, a percentage of which the
telecom companies pay as statutory dues
The Supreme Court had upheld the government position that non-telecom revenues have to be included in the AGR for calculating dues."Since
the government has won, it gives them headroom to talk to judiciary and try to find some of solution
I don't know which form or shape it takes," he added.
