A day after posting the biggest quarterly loss in Corporate India’s history, Vodafone Idea Ltd. said it believes the government is aware of the "tremendous stress" being faced by the telecom industry and wants a healthy sector with one public and three private operators.
The company has been engaging "very positively" with the government, Vodafone Idea's Chief Executive Officer Ravinder Takkar said in a post-earnings call Friday, adding that discussions on telecom stress began even before the Supreme Court’s judgement on adjusted gross revenue of telecom firms.
"In our engagements...the response of the government has been very consistent. They said they want this sector to be healthy, it is a very strategic sector, too important for the country, too important for Digital India vision... Secondly, they have said to us that they want to see three private players and one public sector player in this sector.”
The company believes the government is looking at a "comprehensive solution" for the sector with an aim to restore the industry's health, he said. "We hope to hear something from them very soon.”
On setting a floor price for telecom tariffs, the Vodafone Idea CEO said he did not wish to speculate on how the mechanism can be implemented. "We know it's in the purview of the regulator and the government, and it can be implemented. We know it has been done in certain other countries in the region, but I don't want to speculate on what they would implement or how they would implement.”
Vodafone Idea plans to monetise its 11.15% stake in Indus Towers on completion of the Indus Towers-Bharti Infratel merger, and is also exploring options to monetise nearly 160,000 km of intracity and intercity fibre as well as data centres.
Akshaya Moondra, chief financial officer of Vodafone Idea, said the company continues to remain engaged with its financial creditors but asserted that there is no acceleration of payment which has happened.
"From time to time, some banks have requested us if we could prepay them any amount...we have declined that. We continue to remain engaged with all our financial creditors, but there is no acceleration of payment that has happened," he said.
On vendor finance, Moondra said the company has strong vendor partners and that "they are already supporting us through vendor financing route".
Vodafone Idea has said its ability to continue business will depend on relief sought from the government and positive outcome of the legal option it has—filing of a review petition—in response to Supreme Court’s AGR verdict.
It said the company, through industry body Cellular Operators Association of India, has made representations to the government to provide relief to the telecom sector.
This includes request to not press for the AGR liability payment and grant waivers, not levying spectrum usage charges on non-licenced revenue, reduction of licence fee and SUC rates and use of GST credit for payment of government levies.
COAI has requested the government to allow payment to be made in instalments after some moratorium, and grant a moratorium of two years for the payment of spectrum dues beyond Apr. 1, 2020 up to Mar. 31, 2022.
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