Will Vodafone Idea shut shop after SC rejects AGR relief? Here’s what KM Birla had said

By: |
Updated: Jan 16, 2020 10:07 PM

In an event of the Hindustan Times Leadership Summit, Kumar Mangalam Birla had said, “If you ask me specifically, it is true we will shut shop if we don’t get relief."

vodafone india, airtel, bharti airtel, sc rejects review pleas, telecos to pay hefty finesBharti Airtel issued a statement after SC’s judgement, expressing its disappointment over the ruling.

Will Vodafone Idea shut down its operation or will it continue providing services, after the major setback from the Supreme Court, rejecting telecom companies’ review pleas seeking relief on interests and penalty payments? The question still stands as Kumar Mangalam Birla, Chairman, Vodafone Idea, said in an interview to CNBC TV18 earlier last month that Vodafone Idea may have to shut shop if the government does not agree to provide relief in the AGR case. In another event, at the Hindustan Times summit, Kumar Mangalam Birla had reiterated, “If you ask me specifically, it is true we will shut shop if we don’t get relief. Because there is no company in the world that can pay that kind of fine in three months; it just doesn’t work like that.”

Also Read: SC dismisses telcos Bharti Airtel, Vodafone Idea’s review plea on Rs 1.47 lakh crore AGR dues

Even Bharti Airtel has issued a press release immediately after SC’s judgement, expressing its disappointment over the ruling. The statement read that the industry continues to face severe financial stress and the outcome could further erode the viability of the sector as a whole. It also said that the industry needs to continue to invest in expanding networks, acquiring spectrum and introducing new technologies like 5G but now the money required to pay interest, penalty, and interest on penalty, which forms nearly 75% of AGR dues, would go in this, instead of being used for better causes like serving the digital mission of the country.

Speaking to CNBC TV18, Nitin Soni, Director Corporates, Fitch Ratings, said the verdict was a big setback for Vodafone Idea, as its chairman had publicly stated that they will exit the industry if they were to pay this large amount. He added that it is bad news for Bharti Airtel also, but the company has already raised money. Even though the review petition has been cancelled, the applicant telecom companies can still file curative petition, requesting the court to rethink the judgement. Experts say that the courts rarely change their own verdicts.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Flipkart vs Amazon: Walmart firm wins first festive bout with 68% GMV share; e-shoppers jump to 52M
2InVideo raises Rs 110 crore in funding round led by Sequoia Capital
3Hubilo raises USD 4.5 mn from Lightspeed