Vodafone Idea this month booked a $7 billion quarterly loss, the biggest in Indian corporate history, in large part due to provisions for payments owed
Companies News: The Indian government’s win of a long-contested dispute over telecom fees could end up a Pyrrhic victory, as the billions of dollars in levies now owed are seen as burdens too big to bear for two of the country’s three main carriers. Vodafone Idea Ltd, India’s biggest carrier by user numbers, is widely regarded as most on the ropes, with parent Vodafone Group calling the situation “critical” after the unit was saddled with about $3.9 billion in fresh payments due.
That is the biggest portion of the $13 billion incurred by the sector after India’s Supreme Court last month sided with the government in how spectrum usage and licence fees are calculated. Bharti Airtel, the No 3 provider which must pay roughly $3 billion under the ruling, has also flagged distress, saying the decision casts much doubt on “its ability to continue as a going concern.”
To industry executives and analysts alike, there’s only one solution for the sector which was even before the current crisis debt-ridden and battered by a brutal price war: significant government financial support. Hopes have been raised after the government deferred upcoming spectrum payments for the next two financial years until March 2022. Finance Minister Nirmala Sitharaman also said this month that relief is under consideration although no final call had been made….
No comments:
Post a Comment