The central government has objected to the reported comments of Nick Read, chief executive of Vodafone, that the India unit of the telecom major was headed for liquidation due to, among other factors, the Supreme Court decision requiring payment of Rs 28,300 crore as spectrum dues. According to media reports, Union Telecom and Communications Minister Ravi Shankar Prasad spoke to Vodafone Idea Chairman Kumar Mangalam Birla to express displeasure. Vodafone Plc, the parent entity, says its chief’s comments were taken “out of context”, presenting an incorrect picture.
Vodafone Plc owns 44.3 per cent stake in Vodafone Idea; the Aditya Birla Group holds 26.5 per cent. According to the transcript of Read’s utterances, he’d told analysts that due to the Supreme Court’s ruling on the correct way to determine telecom company dues from their Adjusted Gross Revenue (AGR), on top of the financial stress already present, the situation of the telecom sector in India and at Vodafone Idea was a critical one. “The industry submitted an urgent request for three things: A two-year moratorium for spectrum payments, a reduction for annual licence fees and taxes, and the waiver of interest and penalties for the AGR case and the principal paid over 10 years,” he’d said.
Adding, to analsysts and journalists in London: “The (Indian) government acknowledges the criticality, have informed the committee of secretaries to immediately review a relief package for the industry and we await the recommendations. However, for avoidance of doubt, given the significant capital already invested, we will not inject further Group equity into India.”
An Aditya Birla Group spokesperson declined to comment. An e-mail sent to Vodafone Plc did not elicit a reply till the time of going to press.
British media had quoted Read as saying Vodafone Idea could be heading for liquidation unless the Indian government eased off on demands for mobile spectrum dues. With another airwave auction approaching, Vodafone Idea already has $14 billion in debt and Vodafone PLC has decided not to put any more money into the Indian business, Read was reported as telling reporters.―Business Standard