The Indian Premier League 2020

Business Other News 26 Oct 2019 After SC jolt, telec ...

After SC jolt, telecom majors plead with Centre for relief

DECCAN CHRONICLE. | RAVI RANJAN PRASAD
Published Oct 26, 2019, 1:35 am IST
Updated Oct 26, 2019, 1:35 am IST
They urged the government to review the impact of the Supreme Court judgement on the existing and defunct telecom operators.
Bharti Airtel and MTNL, however, closed in the green gaining 0.90 per cent and 4.85 per cent, respectively.
 Bharti Airtel and MTNL, however, closed in the green gaining 0.90 per cent and 4.85 per cent, respectively.

Mumbai: Stocks of telecom operators and service providers were at the receiving end for the second day in a row after the Supreme Court judgment on the adjusted gross revenue (AGR) case.

Left with no option, telecom operators have started lobbying with the government for some succour from the huge financial implications the judgement entailed.
They urged the government to review the impact of the Supreme Court judgement on the existing and defunct telecom operators.

 

The top losers in the market included Bharti Infratel (-8.63 per cent), Vodafone Idea (-5.08 per cent), Sterlite Technologies (-14.04 per cent), Onmobile Global (-2.38 per cent), GTL Infra (-4.55 per cent) and Reliance Communications (-1.47 per cent). The BSE Telecom Index fell 1.67 per cent.

Bharti Airtel and MTNL, however, closed in the green gaining 0.90 per cent and 4.85 per cent, respectively.

Earlier in the day, Bharti Airtel’s African arm, Airtel Africa, reported a 78 per cent jump in net profit to $96 million for the September quarter, driven by growth in customer base. The company provides telecom services in 14 African countries.

 

Brokerage Motilal Oswal said Bharti Airtel could scrape through by making the overdue payments, but Vodafone Idea “is estimated to require additional capital to fund even the current operations beyond the next three-four quarters.”

Bharti Airtel, in a statement on Supreme Court judgement, said, “The definition of AGR has been a long standing dispute between the DoT and the telecom service providers (TSPs) dating to 2005. The issue of inclusion of revenue from non-telecom activities and interpretation of the heads included in the definition of AGR under the licence conditions has been through several rounds of litigation, which have been in favour of the TSPs till now.”

 

“The TSPs have invested billions of dollars in developing the telecom sector and providing world-class services to consumers. This decision has come at a time when the sector is facing severe financial stress and may further weaken the viability of the sector as a whole. Of the 15 old operators impacted by the order, only two private sector operators remain in service today. The Government must review the impact of this decision and find suitable ways to mitigate the financial burden on the already stressed industry," Bharti Airtel said.

Vodafone Idea in a statement issued to the stock exchanges said, “Clearly this judgment has significantly damaging implications for India’s telecom industry, which is already reeling under huge financial stress and is left with only four operators...”

 

“The order has huge impact on two private operators while most of the other impacted operators have exited the sector. We urgently request that the government engage on this matter in order to find ways to mitigate the financial stress for the industry,” Vodafone Idea said.

“We will engage with the DoT in order for it to consider granting relief, including a waiver of interest and penalties,” Vodafone Idea said.

As per Supreme Court judgement Vodafone Idea’s total outstanding alone as on as on July 5, 2019 is Rs 28,309 crore, which includes interest and penalty on licence fee balance.

 

...




ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT