The telecom sector has been battered by falling tariffs, eroding profitability, and mounting debt, in the face of stiff competition triggered by disruptive offerings of Reliance Jio, owned by Mukesh Ambani.
With the telecom sector reeling under acute financial stress, Vodafone Group Chairman Gerard Kleisterlee and CEO Nick Read on Monday met Telecom Secretary Anshu Prakash, as the company sought a two-year moratorium on deferred spectrum payments, and other relief measures. Vodafone Group officials also met Commerce and Industry Minister Piyush Goyal during the day. Speaking to reporters after a meeting with the telecom secretary, Kleisterlee said the British telecom giant — which is invested in the Indian telecom services market through Vodafone Idea — had “good discussions as always” with the government.
Asked about the speculations in the market that the company may not remain a long-term investor in India given the sectoral stress, Read asserted, “We are absolutely focused on the successful integration of our business between Vodafone and Idea.” Industry sources told PTI that demand for two-year moratorium on payment of spectrum bought in the past auctions, as well as the long-standing issue of GST input tax credit locked up with the government, also figured during the discussions on Monday.
The telecom sector has been battered by falling tariffs, eroding profitability, and mounting debt, in the face of stiff competition triggered by disruptive offerings of Reliance Jio, owned by Mukesh Ambani. The industry has been seeking urgent relief measures for the troubled sector, entailing cut in levies like licence fee and spectrum charges, and release of GST input tax credit locked up with the government.
Billionaire Kumar Mangalam Birla, head of Vodafone Idea, had sent an SOS to the government earlier also for deferring statutory payments in a sector that was not generating enough cash to even service loans. Vodafone Idea has been seeking two-year moratorium on its annual spectrum payment citing debt and stress on the balance sheet.