Govt may have to take the biggest hit if Vodafone Idea fails
NEW DELHI: With outstanding dues of nearly Rs 1.6 lakh crore in spectrum payments and AGR dues, the go nment may be the biggest loser in case Vodafone Idea col pses under crippling losses and heavy de t.
The hit for the go nment just doesn't stop here. If one adds the outstanding Rs 23,000 crore owed to the banks, the impact could be one of the biggest in corporate history as a large part of the loans (65-70%) is extended by state-run lenders. The banks have further extended guarantees worth thousands of crores to the company, which also run the risk of defaults.
"The telecom department and the national exchequer would lose the most in case of a col pse of Vodafone Idea. The picture looks grim considering the poor recoveries and unrealised outstanding after the col pse of Anil Ambani's Reliance Communications and Aircel, where too several thousands of crores of rupees remain locked. Taxpayers stand to lose the most," an analyst with a leading brokerage told TOI.
Cumulatively, the company currently has a de t of Rs 1.8 lakh crore, and has been bleeding financially with losses pegged at Rs 7,000 crore during the March quarter. The de t tops Rs 1.8 lakh crore, according to ICICI Securities. "We see payment of liabilities coming soon, while fund availability remains a challenge," it said.
According to numbers sourced from various analysts and Vodafone Idea's financial results, at Rs 107, the company remains precariously placed with the lowest average revenue per user (Arpu) among its peers. Reliance Jio reported Arpu of Rs 138 and Bharti Airtel at Rs 145, though the latter has said time and again that at least Rs 200 Arpu is needed to nurse the capital-intensive sector back to health.
all the mess of telecom is the gift of slient Manmohan Singh
Unlike banks which extended loans, the spectrum and ADR dues are huge costs imposed on the sector which ruined them . The losers are banks, equipment suppliers and the employees all because of wrong Govt policies of burdening the sector . The article is wrong in saying Govt is the biggest loser if VI fails . Infact they are the cause .
Taxpayers i.e. 4.5% of the entire 1.3 billion janta of this country. Means, only us stupid tax payers will get hurt, rest 95.5% wont even get to understand what has happened.
To pamper the Ambanis and Adanis this go nment will kill all competitors in our spectrum management- this will be a disaster
Jio is responsible for this, recover the lost money from Jio and its bosses so that tax payers money remains safe.
Desh K Gaddaro Ko
Govt should hand over VI to Jio.
Even breaking Jio towers in Punjab couldn’t earn them more customers. Definitely its the failure of poor planning and management by company. There was a time when Vodafone was number one in Indian telecom market now they slipped to 3rd as they couldn’t identify the challenges and kept on ignoring them.
everything was good until jio entered. jio ruined vodafone.
Kulbhushan Rai Madan
These days every decision has to go through the scrutiny of the Supreme Court. These days more than 50% decision of executive are taken by Supreme court.
Meanwhile big brother bambani continues to use small brother bambanis bankrupt companies spectrum, while the company owes 55,000 crores to TRAI. Sold SC judge who retired last year figures in the Pegasus list.
This Govt is economically messing up things day by day.
The govt cannot allow healthy competition to perish and make one company dominate the whole of India.
Monopolies breed greed and disharmony.
VODAFONE MUST STAY . GOVT MUST PAY FOR THEIR LOSSES.
Govt should sell everything to Reliance. After all the biggest beneficiary in the country is Reliance.
Vodafone is definitely one of the best telecom service provider in the country. It's 3rd largest as well in the country. If it can't survive there is something seriously wrong with Govt. Policies.
As long as Jio is making huge profits .....we are not worried about other things .....
Ultimately it's the common man who is going to take the biggest hit. We need atleast a dozen players in the market for fair competition, a viable pricing, an option for premium services. Just to favor Jio, the go nments have crucified others. Time is coming soon when you will have no option except Jio.
Vodafone data speed was very slow and overcharged. I remember paying 250 Rs. for 2 GB data. When Jio came, they provided true 4G speed at very affordable rates. So almost all Vodafone users moved to Jio. Had Vodafone provided good service at affordable rates earlier, they would have had good market share.
We are heading towards monopoly market of Reliance.Big fish eating all others.
Modi killed idea for ambani and now he’s saving it??
The govt allowed jio to give free services for 1 year which led to vodafone and airtel suffer . Jio used oil money to remove competition. After all who can survive giving free services for so long especially with so much de t on its books (vodafone)