Vodafone Idea Gets Hit With Call Drop Penalties Along With Other Telcos

All telecom operators have been slapped with penalties for call drops in the June-September 2018 quarters

Highlights
  • The total penalties are worth Rs 3.2 crore
  • Vodafone Idea is the worst hit telecom operator
  • Reliance Jio has to pay the least penalties

Things have gotten from bad to worse for Vodafone Idea and other telecom operators. As if the dues of Adjusted Gross Revenue (AGR) dues was not enough burdening for the telcos, another pressure of penalties has been slapped on these companies. As per a new ET Telecom report, total penalties of Rs 3.2 crore have been levied on the telecom companies for call drops for the September-June 2018 quarter. The information was shared by Sanjay Dhotre, Minister of State for Communications, in Parliament on Thursday. Among all telecom operators, Vodafone Idea has again been hit in the worst way as most of the fines, in the quantum of Rs 1.76 crore have been levied on Vodafone Idea. These fines have been distributed as Rs 1.11 crore on account of Vodafone network and rest Rs 65 lakh on the Idea network. The least hit telecom operator, in this case, was the Mukesh Ambani led telecom operator, Reliance Jio, which only has to pay Rs 6.5 lakh.

vodafone-idea-call-drops-penalties

Penalties Levied on Telcos for Call Drops

As for the other telecom operators who are facing these penalties, Bharat Sanchar Nigam Limited (BSNL) is looking at penalties of Rs 47.5 lakh, whereas Tata Teleservices will have to pay penalties of Rs 56 lakh. Additionally, there have been penalties of Rs 34 lakh on Bharti Airtel as well. Dhotre remarked in a written reply in Rajya Sabha that BSNL did not meet the benchmark of the minimum number of mobile tower functional in the service area, while the rest of telecom operators were found compliant to the rules. Also, in states like West Bengal and Vodafone Idea in Jammu and Kashmir circle as well, BSNL failed to meet the minimum criteria in regard to network availability.

Telecom Operators Under Pressure of AGR

It is worth noting that out of all the telecom operators, the worst-hit telco has been Vodafone Idea. The Adjusted Gross Revenue (AGR) matter which was passed in the Supreme Court on October 24, has undue pressure on the telecom industry — thus mounting on dues worth Rs 1.47 lakh crore on the companies on account of license fees, Spectrum Usage Charges (SUC), penalties and interests. The decision from the SC was in favour of the government, in which it said that the AGR would be calculated keeping in mind the non-core services as well. A huge chunk of these dues has fallen in the court of Vodafone Idea.

Vodafone Idea Worst Hit Telco

While the next in line is Bharti Airtel, Vodafone Idea has to pay dues worth of Rs 53,000 crore, while Airtel has to pay Rs 35,500 crore worth of dues to the Department of Telecommunications (DoT). On top of this, Vodafone Idea has got an additional Rs 1.11 crore of penalties to pay for the call drops. In terms of relief as well, things look bleak for telecom operators, as apart from a payment moratorium of two years, the telecom companies have not received any relief from the government in the AGR matter. Vodafone Idea, chairman, Kumar Mangalam Birla has also said that in case it does not receive any relief from the government, it would be a sign for Vodafone Idea to shut shop.

Things have been going downhill for Vodafone Idea as the telco has been consistently losing subscribers since the last few quarters and has been hit by penalties and dues which are to be paid in a very short notice. While Bharti Airtel has opted for the way of fundraising to pay off these dues and to ease the financial burden, this is not an option for Vodafone Idea.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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Kiran Fernandes | GoakarthikNikhilPrithviVishal Recent comment authors
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Prithvi
Prithvi

Call Drop is a feature of Vodafone calling now. This needs to be addressed with urgency. Tariffs is one part, Quality of Service is the other which is hitting a new low as far as Vodafone is concerned. Get this fixed.

Nikhil
Nikhil

Six to nine months more for sure.

Kiran Fernandes | Goa
Kiran Fernandes | Goa

they will file for bankruptcy within 6 months. They either want relief from the government for AGR, or leave. My money is on them leaving.

Animesh Sengupta
Animesh Sengupta

Why does it now seem to appear as a systematic method to anhilate all competition in the telecom market to largely benefit a single service provider.

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Pune
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Vodafone-Idea,Airtel
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TATA Sky
Girish Gowda | BengaLuru
Girish Gowda | BengaLuru

It seems that way because the companies which you’re a fan of have not paid any dues owed to the government for a decade. If they had paid under duress and then lodged a case and if they had won, the government would have been liable to pay them back with interest and penalties as well.
They should have thought about paying their dues before taking those billions worth of incentives each year and investing in other countries, huh?

Kiran Fernandes | Goa
Kiran Fernandes | Goa

I agree with GG. The AVoId cartel didn’t pay their dues all these years, and now when they know that the deadline is near they’re crying, asking for relief or threatening to leave the country. They have a choice. Pay by end of Jan, or leave. Airtel has enough cash to pay the dues. Vodafone and Idea on the other hand, well, that’s their problem. They never planned all these years, and it has come to bite them in the back.

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