Vodafone-Idea bankruptcy: 2G users likely to be affected

Even though the Supreme Court rejected telcos plea for recalculation AGR dues, Vodafone-Idea has again filed a petition in the court.

The hammered telecom operator is trying its best to reduce its AGR debt otherwise, its survival is difficult in the country.

“It is inconceivable that even errors/inadvertent additions by the respondent-DoT to the AGR dues have not been allowed to be corrected. It is a travesty of justice that the petitioner is restrained from questioning arithmetical errors/omissions, which are going to cost the petitioner approximately Rs. 25,000 crore (Rs. 5,932 of principal plus interest, penalty, and penalty interest),” said the telco.

The lawyers informed the court that the company is making a loss and cannot work if recalculation is not allowed.

However, if a telecom operator chooses insolvency, then 2G users are likely to be affected.

-Vodafone-Idea 2G users might be affected –
It is worth noting that analysts believe that 2G users of Vodafone-Idea would be impacted if the financial health of the telco goes for insolvency.

Analysts also believe that Reliance Jio and Airtel will have to help all low-end 4G smartphone users.

However, Vodafone-Idea in its review petition said that 27 crores users will be helpless if it goes for bankruptcy.

Notably, Vodafone-Idea has 11.9 crores 3G and 4G users, which means the rest of the users are using a 2G network.

“The low-end 2G handset users of Vi, in case it ceases to exist, has parallels to how operators globally have handled the 2G/3G switch-off issue, even though a portion of their current users were 2G/3G handsets users, “Ashwinder Sethi, Principal at Analysys Mason said.

Analysts said that in the case, Vi closes down its operations, then Airtel Might increase tariffs.

In case, Vi 2G users are planning to choose the Reliance Jio network then, they have to buy a new device, which does not seem feasible for several users.

This means 2G users will suffer in both cases; however, they still have the BSNL option. On the other hand, Reliance Jio is planning to bring its smartphone, which is likely to attract 2G users from Airtel and Vodafone-Idea. Gizbot