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."
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.”
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.