Over the last few weeks, we have been hearing a lot about Vodafone Idea Limited and its massive financial stress. The telco has to pay over Rs 53,000 crore to the government towards AGR dues. As we reported last week, Vodafone Group CEO was about to meet government officials to discuss the AGR crisis. Nick Read, who is the CEO of Vodafone Global Plc met with the government officials and noted that the company wants a fresh and good start in India. As per the sources of ET Telecom, Nick Read met with the finance minister of India Nirmala Sitharaman along with Telecom Minister Ravi Shankar Prasad to discuss relief measure which would ensure the viability of Vodafone Idea in the Indian telecom industry.
Government Might Not Monopolise Indian Telecom Industry
Telecom Minister Ravi Shankar Prasad clearly noted that the government is not planning to monopolise the telecom industry as Vodafone Idea has almost 300 million subscribers in India. When Vodafone and Idea Cellular were merged, the subscriber base was around 440 million. Not only this, the Indian market is growing at a rapid scale and currently attracting various foreign investors.
Nick Read marked that AGR issues must have been resolved back earlier as the telco is now facing huge distress. The government also wants Vodafone Idea to remain invested in India. To ensure Vodafone Idea stays in the industry, the government is planning various relief measures which would solve their massive AGR dues.
Notably, the government might fix floor tariffs soon as it would revive the telecom sector and help the telecom sector to recover their losses. Telecom operators are now supporting floor pricing, including Reliance Jio as the financial health of the telecom industry is not in good shape.
Vodafone Idea AGR Dues a Big Setback for the Company
As per the estimates of DoT, Vodafone Idea has to pay Rs 53,000 crore to the government. However, the operator has self-assessed their AGR dues which stands Rs 23,000 crore out of which approximately Rs 7,000 crore is the principal amount. Currently, Vodafone Idea has just paid Rs 3,500 crore. Vodafone Idea has addressed the government to provide relief measures otherwise, they would be forced to shut down their operations.
Also, the telco giant has asked the government to allow GST refund of Rs 8,000 crore which will be later settled in their AGR dues. Government is also planning to create stress funds which would offer soft loans to stressed telcos on easy terms.