Fall of Vodafone Idea Might Take Down the Entire Telecom Industry With It: Opinion

The situation of the telecom industry is very well known by the public in India. Since the data tariff war was spun by Reliance Jio, the telecom companies have been in deep financial trouble. The troubles have been increasing for telecom companies with the coming of Adjusted Gross Revenue (AGR) dues on their head. The Supreme Court on October 24 passed a verdict which put the telecom companies under the pressure of paying Rs 1.47 lakh crore. The biggest victim of this decision has been Vodafone Idea. On Vodafone Idea, rests a due of Rs 53,000 crore which the telecom operator needs to pay before January 23. However, there is no way yet which has come up for Vodafone Idea as to how it is going to pay the dues. This begs the question, what will happen if Vodafone Idea fails to pay its dues to the Department of Telecommunications (DoT). We already know the answer, as it has been told by the chairman of Vodafone Idea, Kumar Mangalam Birla. He said that Vodafone Idea would have to shut shop if no relief comes its way in the coming days.

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SC Unlikely to Extend Help to Telecom Companies

Vodafone Idea has been searching for relief from various avenues. The telecom operator first sought relief from the government but has already exhausted that opportunity. The telco also filed a review petition on the decision of the Supreme Court to challenge the order of the apex court, but it is unlikely that the telco will get some relief from there too. This means that there is quite a high probability that Vodafone Idea might miss out on paying its dues which are comprised of Spectrum Usage Charged (SUC), license fees, interests, penalties and the interests on those penalties. But, although on the surface, the closure of Vodafone Idea might seem like a big corporate entity going down, it is not simply that. There is more to the story, and it is likely that Vodafone Idea might drag others down as it collapses under financial pressure.