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Vodafone Concept falls brief on licence charge fee

NEW DELHI: Because it fights a determined survival battle amidst heavy losses and mounting debt, Vodafone Concept has didn’t pay the total licence charge to the federal government for the primary quarter of this fiscal, with a shortfall of almost Rs 150 crore.
That is the second quarter of delayed funds by the corporate in direction of its licence charge, and can result in a contemporary penalty and dues demand over and above the almost Rs 1.6 lakh crore that it has to already pay to the division of telecom.
As per the corporate’s personal evaluation, it’s telecom licence charge for the April-June quarter of fiscal 2021-22 was round Rs 690 crore. Nonetheless, it may solely pay round Rs 540 crore, high sources advised TOI.
Questions despatched to the corporate remained unanswered.
The licence is charged at 8% of the adjusted gross revenues of an operator in the course of the prescribed interval, and any delay carries an curiosity penalty cost calculated at MCLR (marginal value of funds primarily based touchdown charge) plus 4%. Notices can be issued to the corporate quickly if the fee continues to stay brief, the sources mentioned.
Vodafone Concept is presently in the midst of a large money crunch, however promoters — Vodafone Plc of the UK and Aditya Birla Group — have refused to make any contemporary fairness investments, seeking to elevate funds from outdoors sources.
Kumar Mangalam Birla, the erstwhile chairman of the corporate, had in a letter to cupboard secretary Rajiv Gauba (in June) provided his group’s stake of 27% to the federal government or another entity that it deems match within the title of “nationwide curiosity”. He sought an pressing authorities bailout, saying that absence of a revival package deal might lead Vodafone Concept in direction of an “irretrievable level of collapse”.
Then again, Vodafone Plc world CEO Nick Learn advised analysts that no extra funds will come to India. “… I need to make it very clear, we’re not placing any further fairness into India.”
The federal government can also be working additional time to work out an answer that permits Vodafone Concept to remain afloat, and never head in direction of chapter, which might give the largest hit to the exchequer. Vodafone Concept, the third-biggest telecom operator with round 27 crore subscribers, owes a large Rs 96,300 crore to the federal government as deferred spectrum fee dues, whereas being liable to pay one other Rs 61,000 crore in direction of AGR liabilities. Each the funds additionally carry curiosity fee value 1000’s of crores, leaving the federal government in a precarious place in case the corporate defaults and steadily heads in direction of chapter.
Among the many numerous choices that the division of telecom is is a plan to increase the two-year moratorium on spectrum funds past fiscal 2021-22. Any such aid at the price of the exchequer, nonetheless, is not going to be restricted simply to Vodafone Concept, however can be given to the whole telecom trade, thus benefiting more healthy gamers resembling Reliance Jio and Bharti Airtel much more.
Sources inside the authorities say that any aid package deal can be “justifiable” if the promoters of Vodafone Concept additionally step forward and put in contemporary fairness. “They should ship constructive alerts and guarantee that they’re prepared to speculate and work in direction of a revival. With out their lively curiosity, any sovereign assure or a revival package deal can be solely a brief reprieve, prefer it occurred beforehand,” the sources mentioned.
Vodafone Concept CEO Ravinder Takkar advised analysts earlier this week that tariff hikes and a flooring pricing (minimal mandated costs on information and voice packs) can be important measures to allow the corporate regain well being.
Talking in the course of the FY22 Q1 earnings name, Takkar mentioned though Birla had not too long ago stepped down as chairman, “he in addition to Aditya Birla Group (ABG) and the Vodafone group are committing to offering help and steering to the corporate, in keeping with the said positions of each the teams”.
Nonetheless, he didn’t elaborate whether or not the 2 will make investments instantly. On fundraising, Takkar maintained that Vodafone Concept continues to stay in lively discussions with potential traders.
A notice by Goldman Sachs has cautioned that Vodafone Iddea has giant repayments due beginning December 2021, and on the present EBITDA (earnings earlier than curiosity, taxes, depreciation, and amortisation) run-rate, it may have a Rs 23,800 crore money shortfall till April 2022.

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