Business Today
Loading...

Telecom woes: Vodafone-Idea to approach government for relief, waiver of interest, penalty

In a filing on Friday, Vodafone Idea Ltd (VIL) said the apex court's verdict on the Adjusted Gross Revenue case, represents a "significant event", and has financial implications, which the company is reviewing

twitter-logo PTI        Last Updated: October 25, 2019  | 19:44 IST
Telecom woes: Vodafone-Idea to approach government for relief, waiver of interest, penalty

Facing over Rs 21,000 crore liability in interest and penalty alone after a Supreme Court ruling on the definition of telecom revenues, Vodafone Idea on Friday said it will approach the government for relief, including a waiver of interest and penalties.

Vodafone-Idea, Bharti Airtel and other telecom operators may have to pay the government a whopping Rs 1.4 lakh crore following the Supreme Court order on Thursday that sent shock waves through an industry already grappling with billions of dollars in debt and an intense tariff war to retain customers.

In a filing on Friday, Vodafone Idea Ltd (VIL) said the apex court's verdict on the Adjusted Gross Revenue case, represents a "significant event", and has financial implications, which the company is reviewing. VIL board met on Thursday evening to discuss the issue, it said.

"The judgement has financial implications, which we are reviewing. We will engage with the DoT (Department of Telecom) in order for it to consider granting relief, including a waiver of interest and penalties," Vodafone Idea said in a BSE filing.

The company is studying the judgement and will evaluate next steps, it added.

VIL noted that the judgement has upheld the Telecom Department's demands, which (as per its submission in the Supreme Court) included Rs 6,871 crore in licence fee balance, Rs 13,006 crore in interest on the balance licence fee, Rs 3,206 crore in penalty and Rs 5,226 crore as interest on the penalty. In effect, the total outstanding as on July 2019 as per submission of Telecom Department adds to Rs 28,309 crore, it noted.

"We cannot presently comment on the correctness and completeness of the aforesaid figures. The Company is studying the judgement and we will evaluate our next steps," it said.

The top court on Thursday had upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual adjusted gross revenue (AGR) of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.

While the government had raised a demand of Rs 92,000 crore from Bharti Airtel, Vodafone, Idea and many now-defunct telecom operators in licence fees based on revised revenue, the actual payout will be around Rs 1.4 lakh crore after including spectrum usage charge, penalty and interest, official sources have said.

Over the next few days, the numbers will get further calibrated. Older telecom companies would be the worst hit, while richest Indian Mukesh Ambani's Reliance Jio, which entered in 2016, owes the least among all.

Shares of Vodafone-Idea had plunged 23 per cent to a record low on Thursday after the Supreme Court verdict, while Airtel had tumbled as much as 9.7 per cent before reversing the losses.

According to the DoT's calculations, Bharti Airtel faces a liability of around Rs 42,000 crore after including licence fees and spectrum usage charges while Vodafone-Idea may have to pay about Rs 40,000 crore. Jio may have to pay around Rs 14 crore.

Also Read: What Rakesh Jhunjhunwala thinks of allegations against Infosys CEO Salil Parekh

Also Read: Marico Q2 net profit surges 17% to Rs 253 crore, but slowdown affects domestic business

Also Read: SBI Q2 profit jumps three-fold to Rs 3,012 crore on higher net interest income

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close