Vodafone Idea Will Probably Lay Off Employees Among Other Measures to Cut Costs

Vodafone Idea's ailing position is forcing it to merge major and small circles along with laying off employees

  • Vodafone Idea's estimate of dues is pegged at Rs 21,533 crore
  • Union Cabinet might soon give a relief to the companies
  • Supreme Court will also hear a modification plea from the telcos

Network integration has been a significant exercise for Vodafone Idea in the months following the merger of the two major telecom companies. In fact, network integration was one of the cornerstones of the alliance that happened three years back. However, now the tables have turned, and Vodafone Idea might be doing network integration in a different manner and out of entirely different reasons. The ailing telecom operator might now be looking forward to cutting costs in an aggressive manner. This means that in a lot of major and minor circles, the users of Vodafone Idea might be using the same network as Vodafone Idea Ltd seeks to merge some big and small circles. This report comes from ET, that also highlights that the employees of the company might also be affected as a result of this move.


Network Integration of a Different Kind

In this exercise to cut costs, around 6 to 7 circles might be in jeopardy. Also, the redundancy of staff will be removed by laying off employees in large numbers. It is also worth noting that as we speak, Vodafone Idea is likely ideating on how many employees should be laid off. The total people working for the company right now are 11,000.

DoT and Vodafone Idea Clash on Estimates

The Department of Telecommunications (DoT) and Vodafone Idea have been on polar ends on the matter of Adjusted Gross Revenue (AGR) as the two have arrived on very different estimates about the total dues which VIL has to pay. While DoT estimates the total dues to be around Rs 53,000 crore, the Vodafone Idea’s estimate pegs this number to be around Rs 21,533 crore.

Vodafone Idea Asking for More Relief

In the coming days, Supreme Court will hear a modification plea from the telecom companies, including Vodafone Idea which will ask for a much easier payment timeline for AGR dues. In the meantime, the telecom company has a burden of paying Rs 3,500 crore in addition to the same amount which it has paid already. Out of all the three telecom companies, Vodafone Idea is the worst hit because of the high quantum of dues. It is worth noting that more than 75% of the dues are constituted by the interests and penalties on the actual dues. As per Vodafone Idea, it would require 15 years to pay off its total AGR dues if combined with the three years’ moratorium and an Rs 8,000 crore GST refund.

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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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