Vodafone-Idea Might Not File For Bankruptcy; Blaming Lack Of Level Playing Field In Industry

Even though Vi is struggling in India, it is unlikely to file for bankruptcy as it does not want to take responsibility for the financial crisis. This development comes at a time when Kumar Mangalam Birla has resigned from his position and wants to sell his stake to PSU.

Regulatory Regime Impacted Vodafone-Idea

Notably, the telecom operator believes that the regulatory regime and lack of playing field have impacted our revenues. It added that the destiny of the operator now lies in the Government's hands.

"The group has put in Herculean efforts to get the business on track. Filing for bankruptcy is not an appealing option considering that it was not a management error that led to the business failure but a lack of a level playing field," said a top group official.

In fact, Vodafone-Idea managing director Ravinder Takkar informed all employees that the company will continue to receive support from Birla and the group. He said that all employees should focus on customers and increasing market share.

For the unaware, Aditya Birla Group has 27.66 percent in the merger firm, whereas Vodafone Group has 44.39 percent. Notably, the merged company was formed in 2018, and its efforts to raise Rs. 25,000 crores from the last 10 months; however, it does not manage to do so.

"The company cannot recover at this stage. Operational profits can't be made. There are no funds that can be infused further by the Aditya Birla Group or Vodafone Group or investors. Its fate now lies in the hands of the government" said a top group official.

He said that in other countries Government takes steps to save business and employment when companies are not involved in any fraud.

It is important to note that the Government has not given any statement on the Vodafone-Idea situation. However, one should not forget that the Department of Telecommunication is planning to take some steps to help the telecom sector, which is expected to help the ailing Vodafone-Idea.

The upcoming package is expected to reduce the license fees on the spectrum usage charges and bank guarantees. In fact, the telecom ministry is likely to make some changes in the adjusted gross revenue (AGR) definition.