Voda Idea outlook still critical, seeking relief from govt: parent
NEW DELHI: UK-based Vodafone Group Plc on Wednesday said that the outlook for Vodafone Idea Ltd, its telecom joint venture with the Aditya Birla Group in India, remains critical and the company is seeking relief from the Indian government.
“In October, the Supreme Court gave an adverse judgement in the adjusted gross revenue (AGR) case against the industry. The outlook for Vodafone Idea remains critical,” Vodafone Group said in a statement announcing its December quarter earnings on Wednesday.
“The company is actively seeking various forms of relief from the Indian government to ensure that the rate and level of payments it makes to the Indian government is sustainable and it can meet its other commitments as they fall due,” the group said.
The October 24 court order that ended a 14-year legal battle between telcos and the department of telecommunications (DoT) asked India’s top wireless carriers to cough up more than ₹1 lakh crore in dues, straining their already precarious financial situation.
Telecom operators had challenged the method adopted by the department of telecommunications to calculate AGR. Licence and spectrum charges are calculated at 8% and 3-5% of AGR, respectively.
While the telcos said AGR refers only to revenues from telecom, DoT insisted that it includes all revenues.
The Supreme Court upheld the government’s definition of adjusted gross revenue and asked operators to pay past dues by 24 January.
Airtel owes ₹35,586 crore to DoT, Vodafone Idea over ₹50,000 crore, and Tata Teleservices, which has sold its mobile services business to Airtel, owes ₹14,000 crore. In December, Aditya Birla Group chairman Kumar Mangalam Birla said that the group’s telecom unit, Vodafone Idea, will have to shut shop if there was no relief from the government following the AGR verdict.
Vodafone Idea, Bharti Airtel and Tata Teleservices have sought more time to pay AGR-related dues and last month filed a modification plea in the Supreme Court to negotiate a sustainable payment schedule with the DoT, which has issued demand notices for revenue share, interest and penalty.
Meanwhile, the British telecom company also said it would cost about €200 million over five years to remove Chinese group Huawei’s equipment from core 5G European activities.
“We have now decided, as a result of the EU (recommendations) and the UK government’s decision, to take out Huawei equipment from the core,” Vodafone chief executive Nick Read said in a Q3 conference call.
“It will take around five years to implement at a cost of approximately €200 million,” he added, stressing that the cost would mostly apply to its European activities outside of Britain.
AFP contributed to this story.