Vodafone Idea Might Shut Its Operations In India

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Vodafone Idea will likely have to shut down its operations in India if the government does not provide any relief on debt. This development comes after the Supreme Court has asked the operator to pay its AGR dues in three months.

Vodafone Idea Might Shut Its Operations In India

 

"They have realized the fact that this is a very critical sector, the whole digital India program rests on this, and it is a strategic sector. They have publicly stated that they want three players from the private sector and one player from the public sector, so I think we can expect much more stimulus from the government because it is required by the sector to survive," Vodafone Idea Limited Chairman Kumar Mangalam Birla was quoted by LiveMint. "If we weren't getting anything then I think that is the end of the story for Vodafone Idea," he added.

However, he seems hopeful that the government will offer more relief for the whole industry. Currently, Birla holds 26 percent in the merger (Vodafone and Idea), rest is held by Vodafone Plc. He also indicated that the company will not invest more money in the country if a government does not offer and relief.

"There is no sense that good money should follow bad money. The absence of relief, infusion of capital wouldn't be good business," Birla added. Besides, he announced that the company will go for the insolvency route, in case of absence of relief.

To recall, both Vodafone Idea and Airtel have posted a loss Rs. 74,000 in Q2F20, due to the AGR issue. In fact, the Supreme Court wants Airtel to pay Rs. 21, 680 crore and Vodafone Idea need to pay Rs. 28,300 crore of debt in three months. Reliance Jio has to pay Rs. 13 crore only, since the company is new in the industry. However, Jio is not in favor of any relief and says that both operators have enough money to pay their dues.

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