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telecom | IST

Vodafone Idea's fate in govt's hand, says Deutsche Bank; recapitalising telco idea floated

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Vodafone Idea in focus after the Supreme Court of India rejected Bharti Airtel and their claim of computation errors in Adjusted Gross Revenue (AGR)-related dues to the Department of Telecommunications (DoT). Deutsche Bank in a report has tried to map the best way forward for the company. According to the report, the fate of Vodafone Idea is in the Indian government’s hand. The Indian government has been talking about wanting three players, but that claim has not been backed by sufficient action and therefore we cannot take that claim very seriously, reads the report.

Vodafone Idea in focus after the Supreme Court of India rejected Bharti Airtel and their claim of computation errors in Adjusted Gross Revenue (AGR)-related dues to the Department of Telecommunications (DoT).
The total demand from Vodafone India is Rs 58,254 crore. Out of this, the company has paid Rs 7,854 crore and according to its self-assessment only owes Rs 21,533 crore to the government.
Deutsche Bank in a report has tried to map the best way forward for the company. According to the report, the fate of Vodafone Idea is in the Indian government’s hand. The Indian government has been talking about wanting three players, but that claim has not been backed by sufficient action and therefore we cannot take that claim very seriously, reads the report.
Talking about the option in front of Vodafone Idea or from a government point of view, they could look at floor price as a way to alleviate the financial stress of Vodafone Idea.
However these discussions have been in the picture for a long time but they have not gone anywhere and according to Deutsche Bank, regulating prices is not the best way.
The government is left with another choice and that is recapitalising Vodafone Idea itself. This is the first time someone has put forth this suggestion.
Out of Vodafone Idea’s total debt of 1.8 lakh crore about 80 percent is what they own to the government itself in the form of the AGR dues or the spectrum obligation.
Watch the accompanying video of CNBC-TV18’s Reema Tendulkar for more details.