India's Vodafone Idea says it is in talks with govt after court rejects plea on dues

A man walks across the LED display board showing the logo of Vodafone-Idea at the ongoing India Mobile Congress 2022, at Pragati Maidan, in New Delhi·Reuters
Reuters
2-min read
In this article:

BENGALURU (Reuters) - Vodafone Idea has begun fresh talks with the Indian government for "remedies" related to $8.4 billion in owed dues, the telecom operator said on Monday, days after the country's top court dismissed a plea to re-compute the dues.

The court ruling is the latest setback for India's no.3 wireless carrier, which had been hoping for relief on the dues related to license fees and spectrum charges that account for about a third of its overall debt of $24 billion.

The company's long-term business plan and revival strategy remain unaffected by the ruling, said CEO Akshaya Moondra on a call with analysts on Monday.

Vodafone Idea and no.2 rival Bharti Airtel had, in a last-resort petition against a similar ruling by the top court in 2021, argued that the telecom department made errors in calculating the so-called adjusted gross revenue (AGR) dues.

Telecom firms have long contested that only revenue accrued from core services should be taken into account, while the government has argued that AGR includes non-core revenue as well.

Following the 2021 ruling, the government brought a relief package for the telecoms sector that included, among other things, a four-year moratorium on airwaves-related payments due to the government.

"We expect to engage further with the government and look forward to working with them and finding a solution for this challenge... we strongly feel that is very possible," said Ravinder Takkar, the company's non-executive chairman.

Vodafone Idea also said it is in advanced talks with existing and new lenders for 250 billion rupees of fund-based loans and 100 billion rupees of non-fund-based loans. It expects the bank funding to conclude in the next seven to eight weeks, it said.

The company is planning a tariff hike in the next 15 months, similar to the industry-wide hike announced in July, Moondra said.

Vodafone Idea shares, which lost about 17% since the ruling on Thursday, closed 3.3% higher on Monday after the company announced a $3.6 billion deal for network equipment supply.

(Reporting by Aleef Jahan, Chris Thomas in Bengaluru)