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Thursday 9 April 2020

If AGR ruling kills Vodafone-Idea, 10,000 jobs will be lost

Mukul Rohatgi said the company's closure would have an adverse effect on the telecom sector that will see competition eliminated completely

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The possible shutting down of Vodafone-Idea in India due to the Supreme Court ruling on its non-payment of adjusted gross revenue (AGR) will deprive 10,000 people of their livelihood, the company’s lawyer Mukul Rohatgi has warned. Vodafone-Idea a partial AGR payment of Rs 2,500 crore to the Department of Telecommunication (DoT) on Monday.

The company has appealed to the Supreme Court not to take any further action like forfeiture of the bank guarantee against it, as it will further damage the functioning of the company.

Rohatgi told a news channel that if Vodafone-Idea had to shut down its business in India, 10,000 people would be unemployed and it would be difficult for its 30 crore consumers.

Vodafone-Idea gone means end of competition in market

Echoing the sentiment expressed in Sirf News on 1 November 2019, Rohatgi said the closure of the company of his client would have an adverse effect on the entire telecom sector. This will completely eliminate competition and only two companies will survive in the market, he said.

Rohatgi said that the outstanding balance of Vodafone-Idea was only Rs 7,000 crore and, after adding interest, penalty, interest on fines, etc, the total amount came in the range of Rs 23,000 to Rs 25,000 crore. He warned, “The government should not rock the boat by encashing the bank guarantees, or the company should close tomorrow (Tuesday).”

“The companies have been telling the DoT that there is no way they can pay these dues overnight. And the government should also wake up to the situation, otherwise, this sector which is very, very stressed, will have only two operators, which is like semi-monopoly, which is what we call oligopoly,” Rohatgi said.

How much telecom companies have paid already

Vodafone-Idea deposited AGR dues of Rs 2,500 crore on Monday. Bharti Airtel has paid up Rs 10,000 crore to the DoT as part of its AGR dues. The telecom company made this payment on behalf of Bharti Airtel, Bharti Hexacom and Telenor.

In the letter sent by the company to the DoT, it said that the company is assessing the total AGR payment and the outstanding payment would be made after the assessment is completed.

Following the order of the Supreme Court, the telecom companies have to pay a whopping Rs 1.47 lakh crore to the DoT.

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Since the facts and figures related to the novel coronavirus disease 2019 (nCOVID-19, COVID-19 or COVID) are changing by the minute, Sirf News has begun this blog to keep the readers updated with information coming from authentic sources

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