The telecom ministry has opened an inspection into the affairs and management of struggling telco Vodafone Idea as talks regarding the government\u2019s planned move to pick up equity in the company \u2014 in lieu of the interest payout for spectrum payment moratorium \u2014 have \u201cmore or less collapsed\u201d, top sources said. Any re-think on the matter would happen only when the company\u2019s promoters \u2014 industrialist Kumar Mangalam Birla\u2019s Aditya Birla Group and Vodafone Plc of the UK \u2014 put money into the debt-laden telco, or else manage to rope in a financial investor, sources said.<\/p>\n
Also, the government is hesitant to pick up equity in the company (as had been approved by the Cabinet) as its share price has fallen under Rs 10 (it closed at Rs 7. 85 on Friday, down 7% in the past six months). The board of the company had offered the government the stake at a par value of Rs 10 per share, based on which the government had made all the financial calculations regarding its entry (for a stake of around 33%). \u201cThe DoT has opened an \u2018inspection\u2019 of Vodafone Idea\u2019s financials as well as operations to ascertain the health of the company,\u201d sources told TOI. \u201cWe are studying their performance, their financial position, and their strength with customers. \u201d<\/p>\n
When contacted on the issue of inspection, a spokesperson of the company said, \u201cWe are not aware of any such information. We cannot comment on baseless, unsubstantiated and malicious rumours which seem to be an attempt to malign the reputation of the company by vested interests. \u201dSenior officials believe the company \u2014 formed after the merger between the erstwhile Idea Cellular and Vodafone India \u2014 has \u201cmismanaged\u201d its affairs, including costs, even as it bought \u201cexcess\u201d spectrum at high prices, which is now lying idle and is proving to be a burden on its finances and operations.<\/p>\n
\u201cThe confidence is missing when we look at the management and affairs of Vodafone Idea. The talks have more or less collapsed if the present conditions continue,\u201d a top source said, when asked about the reasons for the delay in the government\u2019s plan to pick up equity.<\/p>\n
Vodafone Idea has been reeling under the losses and heavy debt and has failed to show any signs of improvement despite the government throwing in a financial package for the telecom industry in September of 2021. The industry got further boosters at the time of 5G spectrum auctions last year, though the company hasn\u2019t been able to turn around business or get any major financial investment. Vodafone Idea, which is the only private operator that has not put up even a single 5G tower even as its much bigger rivals such as Reliance Jio and Bharti Airtel race ahead with the next-generation telecom services, carried anet debt of Rs 2. 2 lakh crore at the end of July-September, 2022 quarter (it\u2019s last-reported financial performance).<\/p>\n","protected":false},"excerpt":{"rendered":"
The telecom ministry has opened an inspection into the affairs and management of struggling telco Vodafone Idea as talks regarding the government\u2019s planned move to pick up equity in the company \u2014 in lieu of the interest payout for spectrum payment moratorium \u2014 have \u201cmore or less collapsed\u201d, top sources said. Any re-think on the matter would happen only when the company\u2019s promoters \u2014 industrialist Kumar Mangalam Birla\u2019s Aditya Birla Group and Vodafone Plc of the UK \u2014 put money into the debt-laden telco, or else manage to rope in a financial investor, sources said. Also, the government is hesitant […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-799836","post","type-post","status-publish","format-standard","hentry","category-telecom"],"acf":[],"_links":{"self":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/799836","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/comments?post=799836"}],"version-history":[{"count":0,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/799836\/revisions"}],"wp:attachment":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/media?parent=799836"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/categories?post=799836"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/tags?post=799836"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}