Vodafone Idea Set to Demand Rs 7,249 crore from DoT in TDSAT as Merger Finishes

It’s not even a week since Vodafone Idea finalised its M&A deal and the company has already started making moves left, right and centre to prepare its war chest. In the latest turn of events, Vodafone Idea is set to move telecom tribunal to demand Rs 7,249 crore which the Department of Telecommunications (DoT) had forced to pay to clear the most significant M&A deal of the sector. Now with a massive competition ahead on the path, Vodafone Idea is ready to struggle to rake in as much cash as possible so that it will be better able to take on the competition.

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Vodafone Idea Depending on Cash Reserve to Fight Competition

As per an ET report, a person aware of the matter said, “It is the most logical step to go to courts and recover the money. Later on, auditors should not question that when other telcos have gone to the courts on similar dues, why the merged company not protected its money.” The person further added that right now, Bharti Airtel and Reliance Jio stand in front of the telecom behemoth as its biggest competitors, and the cash reserve is going to be of prime importance in the war which is still ongoing.

Plans of Reverting Pre-Merger Payment to DoT

To recall, before the merger, the department had demanded bank guarantee worth Rs 3,322.44 crore from Idea Cellular and Rs 3,926.34 crore in cash from Vodafone India to approve the consolidation in the names of One-time spectrum charges (OTSC). During that time, Idea and Vodafone had given in to the demand to accelerate the merger process, now that both the companies have come together and attained a position of advantage, they are seeking ways to get their money back. As per the experts, the newly formed entity will raise the demand in Telecom Disputes Settlement and Appellate Tribunal, and further cases like these might also scale up to the Supreme Court level if not resolved. When ET posed questions to the telco, there was no response from the company.

Airtel-Telenor Ruling to Back Vodafone-Idea’s Demand

A senior DoT official remarked about the situation, “We expect them to move TDSAT. It’s a question of when not if. Before the merger, they pay the guarantees and the moment it gets sealed, they head for the courts.” He further added that DoT would do all in its hands to defend the demand.

However, there is a possibility that the ruling might lean towards Vodafone Idea’s turf as the telco has found a recent precedent in Bharti Airtel-Telenor India case. Although DoT officials have said that the Supreme Court ruling remains specific to that particular case and cannot be used as a precedent.

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18 Comments on "Vodafone Idea Set to Demand Rs 7,249 crore from DoT in TDSAT as Merger Finishes"

 

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mani
September 6, 2018 12:29 am 12:29 AM

Facing strange problem wth Vodafone since last 1month everyday at night arounf 9 pm 4g speed drops to 1 Mbps nd next morning speed is back to 20 Mbps nd it stays same throughout the day.This is not the problem in only my location.I stay in Lucknow

Aamit, Kolkata
September 6, 2018 9:36 am 9:36 AM

The same is happening in Hooghly which is under Kolkata circle. This problem from 8 pm to 12 am speed is throttled to 1 mbps.

AU(Airtel User)
September 5, 2018 7:39 pm 7:39 PM

LoL, they aren’t getting single paisa back.
They should be ready to give more money to government which they owe since hutch vodafone merger.

Sayak Roy - Kolkata
September 5, 2018 1:23 pm 1:23 PM

Off topic, but I would really appreciate some help here. One of my relatives has a Vodafone connection on a Moto X4. While 4G and 3G services work fine, the phone goes into emergency calls only mode when I select 2G network. Now that isn’t a problem in cities, but in rural areas the phone completely goes off service where 3G is weak.

dragonmonk
September 5, 2018 7:13 pm 7:13 PM

@sayak This appears to be a problem with Vodafone 2G network during the last few days at several locations.

Sayak Roy - Kolkata
September 5, 2018 8:24 pm 8:24 PM

Oh okay. Nothing wrong with the device, then. Thank you all for your inputs! 🙂

Chetan | Bengaluru
September 5, 2018 6:43 pm 6:43 PM
Both companies have switched off towers where ever they feel the area is not profitable. Check on twitter, people are complaining in villages that in august either Idea or Vodafone switched off towers and none of the two companies have coverage there… On contrary one of the person even wrote in hindi to Idea ” You people have switched off tower rendering us without coverage and here is Reliance jio who is installing tower in our village now, work has started since 1 week back , Now all 50 of us will move to Jio once work is complete”… So… Read more »
Maratha | Pune
September 6, 2018 12:47 am 12:47 AM

EBITDA*

Kaushik IMA
September 5, 2018 11:11 pm 11:11 PM

P.S.

The value of assets deprecates over time.

Why would an intelligent businessman sell LATER at high debt and low valuation than today?

Use logic rather than pointing fingers. There is a lot of logic applied to the merger.

P.S. after merger my customer service experience has not changed at all. Sad to see your experience.

Chetan | Bangalore
September 6, 2018 12:31 am 12:31 AM

Kaushik buddy, I have seen plenty of your logic in past and replied aptly with nos …. Hope you remember .. let’s close this and move on… Don’t wanna fight again… Vodafone idea Ltd. is in precarious situation, let’s see how things shapes up in yr time ..

Kaushik IMA
September 6, 2018 2:11 pm 2:11 PM

Chetan Bro,

I hope you remember that sometimes your arguments have not made sense, and I hope you realise that you are not on the business end of the spectrum, you are/affiliated to employee “service” end. 🙂

Again, let’s sit and watch how things shape up. I am confident government will take moves if anti competitive situation is created due to less players or existing players not able to compete effectively.

Kaushik IMA
September 5, 2018 11:09 pm 11:09 PM

Ok Chetan,

The only response I have for u is that whatever VOID does, Airtel is next.

In khandwa road, outskirts of Indore, Airtel has switched off sites.

You know why? Less profit, less users.

Rest of the logic u apply equally to VOID and Airtel and you will then realise telecom industry is kinda bleak irrespective of operator.

Chetan | Bangalore
September 6, 2018 12:26 am 12:26 AM
Village which I am referring to had 50 odd connection on idea and it turned out to be non profitable for JV. They gave 50 connection on plate to Jio. Like this there are plenty places where idea had strength of its tower/ coverage in rural areas but looks like idea has its own way .. Airtel has its plans clear, no more 2G customers and let them go if they want .. but can idea afford this… No… If Airtel is not able to still switch off 3G , 2G , then what makes idea do so, does its… Read more »
Kaushik IMA
September 6, 2018 2:09 pm 2:09 PM

Again Chetan,

NO logic in your argument.

I told you in very clear language: Airtel is doing the same things as VOID.

They are all looking at what is making business sense and what isn’t.

You cannot say Airtel is doing this so Idea can, or that if Airtel is not doing this then Idea/Vodafone can’t, that’s just crazy talk and you know it.

I think really you need to stop obsessing and let things unfold.

Kevin
September 6, 2018 10:11 pm 10:11 PM

Does Kaushik IMA work for Vodafone Idea? His tone and words seems like he does.

Kaushik IMA
September 7, 2018 10:03 am 10:03 AM
Hi Kevin, No I don’t. Actually I have dealings through my organisation with Airtel, Vodafone and Idea. Note in past I have commented favourably on Jio and Airtel especially broadband. I have also criticised Vodafone heavily if you check my past posts. I am a bit positive about idea + Vodafone because in post Jio era I have seen significant overhaul in services and customer service. I have seen their network capacity and quality improve even in weaker circles. I don’t have a particular issue against airtel other than their tendency to misuse customer data and impose hidden charges. Actually… Read more »
Anand
September 6, 2018 6:59 pm 6:59 PM
Kaushik IMA, I agree with Chetan. Vodafone Idea will soon lose out big time because of their agressive network cost cutting, for network is the no.1 priority for most customers. I ported out of Vodafone (primary no.) to Jio because once in Maharashtra, in a village I couldnt find even its 3G network and I needed to access internet urgently for work. Thankfully, I also had Jio on 2nd phone and was my savior! So it’s not necessarily for people living in the area, but also for those who are visiting/roaming, network coverage/staying connected is critical! Vodafone Idea charge a… Read more »
Kaushik IMA
September 7, 2018 10:08 am 10:08 AM
Bro Anand, these are anecdotal. Even i can talk about Airtel getting bad over time and pinpoint those areas but it doesn’t work on grand scale. Couple of months ago idea was horrible to use in Mumbai and I have posted extensively that idea is bad in Mumbai. But the last time I went, I found idea had suddenly become OK to use due to the ICR with Vodafone. Similarly, I have extensively posted over 2 years just how bad Vodafone is in MPCG, but no more because now Vodafone uses idea network in MPCG…. I have seen these changes… Read more »
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