Vodafone Idea shares fall by 23% after India orders billions in contributions – TechCrunch

Advertisement

Shares of Vodafone The idea fell by more than 23% on Friday after India's top court ordered the third largest telecom company and Airtel, the third largest telecom network, to settle and pay billions of dollars within a month.

Advertisement

In a strongly worded opinion, the Supreme Court rejected the request for telecom networks to postpone payment historic $ 13 billion levies to the government. "This is pure contempt, 100% contempt," justice Arun Mishra told lawyers.

The order today, which can result in the British telecom giant Vodafone the collapse of the local joint venture, saw the shares of Vodafone Idea fall by 23.21%. Vodafone Idea had more than 336 million subscribers since November last year, according to official figures (PDF).

The company did not respond to a request for comment.

Advertisement

The order of the Supreme Court was followed by instructions from the Ministry of Telecommunications to pay the fees before the end of Friday. The local telecommunications ministry also ordered the telecom companies to keep their relevant offices open on Saturdays to facilitate & # 39; facilitate & # 39; and answer questions.

In October, the Supreme Court ruled that Vodafone Idea and Bharti Airtel, as well as various other operators, including some that are no longer operational, must pay the government a combined $ 13 billion in adjusted gross income within 90 days as spectrum use and licensing fees.

The Indian government and telecom operators have disputed for ten years how the gross income should be calculated. The government has required the license and spectrum fee that operators have to pay as part of their income. Telco & # 39; s have argued that only core revenue from the use of spectrum should be taken into account for the calculation of adjusted gross income.

Advertisement

Responding to the ruling, Airtel said it would pay $ 1.3 billion the next week and the remainder (about $ 5 billion) before March 17, when the Supreme Court reviewed the case again. The shares rose by 4.69% on Friday as the telecom operator is better able to pay and the prospects that this is only the second major telecom network to fight Reliance Jio, the top network of India's richest man Mukesh Ambani .

In recent months, executives of Vodafone's UK headquarters, which owns 45% of Vodafone Idea, have said that the group's telecom activities in India would "close" if the government did not provide assistance. Vodafone Idea, which is already burdened with $ 14 billion in net debt, owes approximately $ 4 billion in taxes to the Indian government.

Vodafone Idea Chairman Kumar Mangalam Birla said in December that the company is on its way to insolvency without government assistance. "There is no point in putting good money after bad," he said then.

The last few years have been difficult for telecom companies in India, who have arrived in the country to secure part of the second most densely populated market in the world. But since 2016, they have lost tens of millions of subscribers after Ambani Reliance launched Jio and offered free data and voice calls over an extended period of time, forcing every other company to lower its rates.

Sidharth Luthra, a senior lawyer at the Supreme Court, said in an interview broadcast on television that the court is in her right to reach such a decision, but said they might have had to consider the economic consequences of the ruling that would have an impact on employment and which could disrupt the daily lives of people who depend on the services of a network.

Vodafone Idea is it top trending topic on Twitter from the beginning of Saturday (local time), because many people expressed concern about the future prospects of the telecom network and were concerned about whether the service would remain operational for them.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *