Vodafone Idea (Vi), the third-largest telecom operator in India, has been very vocal about the surprise and how it is “inconceivable” for it to understand that the Supreme Court (SC) can’t order a rectification in errors made by the Department of Telecommunications (DoT) while calculating the adjusted gross revenue (AGR) dues. It is not just Vodafone Idea, but also Bharti Airtel, who was rooting for the SC to order the DoT for rectifying the errors made in total dues calculation. But the SC didn’t order the telecom department to rectify the errors. This has put tremendous pressure on the telcos, especially Vodafone Idea.
Vodafone Idea Didn’t Get Relief Package, But It Will Still Want Review Petition to Go Well
Vodafone Idea had filed a review petition in the Supreme Court against the apex court’s order on July 23, 2021. Vi and Airtel both wanted the DoT to correct its errors because a higher wrong amount meant the telcos had to pay extra interest worth thousands of crores to the government.
At a time when the complete sector is struggling with finances because of the low average revenue per user (ARPU), the telcos don’t want any further debt on their books, especially the amount which they don’t deserve.
Even though the sector didn’t get the relief package announcement since the cabinet didn’t hear DoT’s proposal, Vi would be rooting for the review petition to go its way. If it does, that would be a big relief for the company in itself. On top of this, if a relief package is also announced, new investors might show some interest in helping out Vodafone Idea after all. However, everything’s right now a ‘hope’, and nothing’s confirmed to happen.
Regardless, the telecom sector of India makes more sense with the presence of at least 3 private operators. This arrangement is the best because it avoids duopoly and also keeps the tariffs in check. It will be interesting to see how things pan out for Vodafone Idea with the review petition.
