The country’s largest telecom operator will shut its business and move towards insolvency if it does not get any relief regarding the over Rs 40,000 crore adjusted gross revenue-based (AGR) dues it has to pay the Department of Telecom, Kumar Mangalam Birla, Chairman of Vodafone Idea, said on Friday.
Speaking at the Hindustan Times Leadership Summit here, Birla said that the issue of AGR is needed to be resolved urgently. “We will shut shop if we don’t get relief, it could be the end of the story for us. There is no company in world that could get that kind of money in three months,” he said.
He further said that there will be no further infusion in to the venture by either the Aditya Birla Group or Vodafone, however adding that, added that his telecom business cannot be called a failure. The Supreme Court in a recent verdict allowed the Centre to recover Rs 92,641 crore in total AGR from telcos, which impacts Airtel and Vodafone Idea the most.
In November, the Department of Telecommunications (DoT) sent notices to the telcos, asking them to pay the AGR dues on a self-assessment basis within the next three months. Speaking at the event, Birla, also said that the government has realized that telecom is a critical and strategic sector.
With ongoing crisis, not just the private telecom operators, even the state-run Bharat Sanchar Nigam Limited (BSNL) has also felt the heat. Just like every other telco, BSNL has also announced plans to raise tariff for its mobile recharges and bill schemes.
It should thus not come as a surprise that BSNL is following the three major private service providers. The state-owned telco received a revival package from the Centre in October. The government is looking to merge BSNL and Mahanagar Telephone Nigam Limited (MTNL) into a single entity. The proposed revival package along with tariff hike should aid the struggling telecom operator increase its cash flow. The telecom industry, after battling tariff war started by Reliance Jio for nearly three years, is now looking for sustainability.
Written with inputs from IANS