British telecom giant Vodafone Group on Wednesday apologised to the government after union telecom minister Ravi Shankar Prasad expressed his displeasure to Vodafone Idea Chairman Kumar Mangalam Birla about chief executive officer Nick Read's comments criticising the regulatory framework in India, sources privy to the developments told CNBC-TV18.
The Vodafone CEO stated that he has been quoted out of context and he appreciates the steps being taken by the Indian government, sources said, requesting anonymity.
Yesterday, Vodafone chief had said, "Financially there's been a heavy burden through unsupportive regulation, excessive taxes and on top of that we got the negative Supreme Court decision."
Read said, "As part of the agreement to merge Vodafone India and Idea Cellular, the parties agreed a mechanism for payments between Vodafone Group and VIL pursuant to the crystallisation of certain identified contingent liabilities in relation to legal, regulatory, tax and other matters, including the Adjusted Gross Revenue (AGR) dispute before the Supreme Court, and refunds relating to Vodafone India and Idea Cellular."
Vodafone's operating loss from India business jumped to 692 million euros in April-September from 133 million euros in the same period last year. Vodafone wrote off the carrying value of its share in the loss-making joint venture.
"In October, the Supreme Court in India ruled against the industry in a dispute over the calculation of licence and other regulatory fees, and Vodafone Idea is now liable for very substantial demands made by the Department of Telecommunications in relation to these fees," the company said in its earnings statement yesterday. "We are actively engaging with the government to seek financial relief for Vodafone Idea."
The liability in telecom licence fee and spectrum usage charge together with penalty and interest for late payment may run into Rs 1.4 lakh crore for the industry. Vodafone-Idea may have to pay a third of it.
(With inputs from PTI)