19 July 2021
India’s Vodafone Idea is scouting for funds amid losses and a dwindling subscriber base, with question marks over the company's long-term viability.
The beleaguered mobile phone service provider had recently approached the telecom department seeking an extension of the two-year moratorium on paying spectrum fees by one more year.
The two-year moratorium was given to all telecom operators for FY21 and FY22 - and officials believe a moratorium cannot be for one company and has to be for the entire sector. As this decision has revenue implications, approval by the finance ministry will be needed.
Vodafone Idea had said it was unable to generate enough cash, as it has also had a payment obligation towards adjusted gross revenue tax to be paid to the telecom department, as mandated by the Supreme Court in 2019.
The top court had widened the scope of adjusted gross revenue to include income from non-core items. This had affected legacy companies such as Vodafone Idea and Bharti Airtel.
The operator must pay Rs584bn (US$7.83bn), while it has so far paid Rs78.54bn (US$1.06bn).