Telecom Industry in Buzz as Vodafone may Exit its India Operations
A questionnaire has been sent through the mail by the IANS (Indo-Asian News Service) to a spokesperson of the company in India. Then, the IANS was politely been
- by aditi verma 2019-10-31 12:50:07
The telecom regulatory world is buzzing with the exciting talks about the popular telecom operator firm Vodafone that is currently preparing to close down its operations in India.
A questionnaire has been sent through the mail by the IANS (Indo-Asian News Service) to a spokesperson of the company in India. Then, the IANS was politely been asked to send their queries to Mr Ben Padovan, the Group Head of Corporate Communications at Vodafone Group Plc. Even after two days of sending the questionnaire, the Vodafone Group did not respond to any of the queries until the time of printing.
There has been a recent buzz in the telecom industry that Vodafone is ready to exit its India operations any time soon. The reason behind their exit would be the enormous operating losses that the company has incurred in the Vodafone Idea Joint Venture Company. There has been a loss of lakhs of monthly subscribers in the Indian market and the gradually diminishing market capitalization which is harming the company as there is no fresh fundraising.
On Wednesday, 30th October 2019, Vodafone Idea had issued a proper statement of clarification on the claim that the company Vodafone-Idea has reportedly approached its lenders for a debt recast.
"There has been some reports and buzz in the media alleging that Vodafone Idea has reportedly approached its lenders for a debt recast. We deny any such news about Vodafone Group and dismiss this as completely baseless and factually incorrect. We have not made any requests for a debt recast in the current time to any of our lenders. We did not ask for the reworking of the payment terms. We have been continually paying all of our debts as and when this falls due," as per the company's statement.
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The most recent event for Vodafone Idea has been the recent judgement of the Supreme Court on the AGR (Adjusted Gross Revenue) under which the company will have to pay an approximate amount of Rs 28,309 crore within three months.
After getting a sharp fall in its shares, Vodafone-Idea has made it clarified to the respective stock exchanges where it is listed on 25th October 2019 and again on Tuesday, 29th October 2019, the company said that "the judgement of the Supreme Court represents an important event with respect for the company."
"Right now we cannot comment on the correctness and the completeness of the given figures. The company is currently studying and analysing the judgement and we will evaluate our steps and make our plan," the company said in a statement.
There has been a recent buzz in the telecom industry that Vodafone is ready to exit its India operations any time soon. The reason behind their exit would be the enormous operating losses that the company has incurred in the Vodafone Idea Joint Venture Company. There has been a loss of lakhs of monthly subscribers in the Indian market and the gradually diminishing market capitalization which is harming the company as there is no fresh fundraising.
On Wednesday, 30th October 2019, Vodafone Idea had issued a proper statement of clarification on the claim that the company Vodafone-Idea has reportedly approached its lenders for a debt recast.
"There has been some reports and buzz in the media alleging that Vodafone Idea has reportedly approached its lenders for a debt recast. We deny any such news about Vodafone Group and dismiss this as completely baseless and factually incorrect. We have not made any requests for a debt recast in the current time to any of our lenders. We did not ask for the reworking of the payment terms. We have been continually paying all of our debts as and when this falls due," as per the company's statement.
Read: Mukesh Ambani's plans an E-commerce giant worth $24 billion
The most recent event for Vodafone Idea has been the recent judgement of the Supreme Court on the AGR (Adjusted Gross Revenue) under which the company will have to pay an approximate amount of Rs 28,309 crore within three months.
After getting a sharp fall in its shares, Vodafone-Idea has made it clarified to the respective stock exchanges where it is listed on 25th October 2019 and again on Tuesday, 29th October 2019, the company said that "the judgement of the Supreme Court represents an important event with respect for the company."
"Right now we cannot comment on the correctness and the completeness of the given figures. The company is currently studying and analysing the judgement and we will evaluate our steps and make our plan," the company said in a statement.
"The Judgement will have financial implications, that we are presently reviewing. We will meet with the DoT (Department of Telecommunications) so that we can make it consider granting us a relief, as well as a waiver on the interest and penalties," the company added.
After the verdict of the Supreme Court, Vodafone-Idea's stocks had hit a 52-week low 3.66 and the trades at Rs 3.86 on Wednesday morning (30th October 2019). The company's market capitalization is at Rs 11,091 crore, and the investments are worth several billion dollars.
On the AGR verdict, the company said in a statement to the media that, "Vodafone Idea is highly disappointed by the Hon'ble Supreme Court's judgment on the case of Adjusted Gross Revenue (AGR)".
"We will be studying the ruling as soon as it will be made available, and meet with our legal advisers, to plan our next steps. If there are any technical or procedural grounds for doing so, this may then include a Review Application," the company added.
"The judgment has many damaging implications for the telecom industry of India, which is already under huge financial stress and there are only four telecom operators left in the whole country.
"A massive investment of several billion dollars has been made for creating world-class networks for the whole nation. Today's order by the Supreme Court has a big impact on two of the private telecom operators although many other operators who were impacted have exited. We have requested that the government should engage with the companies in this matter so that they can together find ways to get rid of the financial stress for the telecom industry", the company added.
Vodafone Idea had made an announcement last week that said that in the issue of the merger of the Indus Towers, the company holds 11.15 percent equity, along with Bharti Infratel. It did not happen to make it possible to meet the conditions, including the DoT approval under the FDI regulations before the deadline of October 24, 2019. The parties have together decided to extend the target date by two months and the final date is 24th December 2019.
Vodafone Idea will be receiving a lower payment of cash that will be based on the fall in the price of shares of Bharti Infratel, movements in the net debt at Bharti infrared and Indus.
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After the verdict of the Supreme Court, Vodafone-Idea's stocks had hit a 52-week low 3.66 and the trades at Rs 3.86 on Wednesday morning (30th October 2019). The company's market capitalization is at Rs 11,091 crore, and the investments are worth several billion dollars.
On the AGR verdict, the company said in a statement to the media that, "Vodafone Idea is highly disappointed by the Hon'ble Supreme Court's judgment on the case of Adjusted Gross Revenue (AGR)".
"We will be studying the ruling as soon as it will be made available, and meet with our legal advisers, to plan our next steps. If there are any technical or procedural grounds for doing so, this may then include a Review Application," the company added.
"The judgment has many damaging implications for the telecom industry of India, which is already under huge financial stress and there are only four telecom operators left in the whole country.
"A massive investment of several billion dollars has been made for creating world-class networks for the whole nation. Today's order by the Supreme Court has a big impact on two of the private telecom operators although many other operators who were impacted have exited. We have requested that the government should engage with the companies in this matter so that they can together find ways to get rid of the financial stress for the telecom industry", the company added.
Vodafone Idea had made an announcement last week that said that in the issue of the merger of the Indus Towers, the company holds 11.15 percent equity, along with Bharti Infratel. It did not happen to make it possible to meet the conditions, including the DoT approval under the FDI regulations before the deadline of October 24, 2019. The parties have together decided to extend the target date by two months and the final date is 24th December 2019.
Vodafone Idea will be receiving a lower payment of cash that will be based on the fall in the price of shares of Bharti Infratel, movements in the net debt at Bharti infrared and Indus.
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