Vodafone shares Idea fell more than 23% on Friday after the Indian Apex court ordered the country's second largest telecommunications operator and Airtel, the third largest telecommunications network, to arrange and pay billions of dollars a month ,
In a strong ruling, the Supreme Court denied telecommunications networks' request to defer payment of $ 13 billion in historic taxes to the government. "This is pure contempt, 1
Today's decision, which could lead to the breakdown of the local joint venture of the British telecommunications giant Vodafone caused Vodafone Idea's shares to fall by 23.21%. According to official information (PDF), Vodafone Idea had more than 336 million subscribers last November.
The company did not respond to a request for comment.
The Supreme Court's order followed the order from the Telecoms division to pay the fees by the end of Friday. The local telecommunications ministry also ordered telecommunications companies to keep their respective offices open on Saturday to "facilitate" payments and answer questions.
In October, the Supreme Court ruled that Vodafone Idea and Bharti Airtel, as well as several other operators, including some who are no longer operational, must collectively collect $ 13 billion in gross revenues as spectrum usage and revenue from the government within 90 days Pay royalties.
The Indian government and telecommunications operators have been controversial for a decade of how gross revenue should be calculated. The government has mandated the license and frequency fee to be paid by operators as part of their revenue. Telecommunications companies have argued that when calculating the adjusted gross income, only the core income from the use of the spectrum should be taken into account.
Airtel commented on the verdict, saying that it would pay $ 1.3 billion by next week and the rest (about $ 5 billion) beforehand if the Supreme Court tried the case again on March 17. Its shares rose 4.69% on Friday as the telecom operator can pay better and there is a prospect that it is only the second major telecommunications network to fight Reliance Jio, the top network of India's richest man, Mukesh Ambani . 19659002] In recent months, UK-based Vodafone executives, who own 45% of Vodafone Idea, have said the group's telecommunications business in India would "close the shop" if the government didn't provide relief. Vodafone Idea, which already has $ 14 billion in net debt, owes the Indian government around $ 4 billion in taxes.
Kumar Mangalam Birla, chairman of Vodafone Idea, said in December that the company was in the absence of a relief from the government on the path to bankruptcy. "It makes no sense to put good money after bad," he said at the time.
The past few years have been difficult for telecommunications operators in India, which had arrived in the nation, to secure part of the second most populous market in the world. But since 2016, they have lost tens of millions of subscribers after Ambani Reliance started Jio and offered free data and voice calls for extended periods of time, which forced every other company to lower their tariffs.
Sidharth Luthra, senior advocate at The Supreme Court said in a television interview that the court had the right to make such a decision, but said that they may have had to take into account the economic ramifications of the judgment, which could affect jobs impact and disrupt the everyday life of people who rely on it through the services of a network.
Vodafone Idea has been the top trend topic on Twitter since early Saturday (local time), as many people raised concerns about the future prospects of the telecommunications network and worried about the service would remain operational for them.