NEW DELHI :
Vodafone Group is confident of the India growth story and the country remains a key market for the telecom company, chief executive officer Nick Read has told Prime Minister Narendra Modi.
“Read has sent a letter to the PM and other senior government officials to clarify that some of the coverage, particularly in India, has been distorted. Neither he nor his team spoke to any Indian media. Quotes were attributed to him that he never made," a person aware of the matter said requesting anonymity.
Mint has not seen a copy of the letter. Emails sent to Vodafone Group and Ministry of Communications were not answered immediately.
"Read spoke specifically about financial stress in telecom sector in India and that situation had become critical," the person cited above said, adding that the group appreciates the government’s efforts to set up a special panel to suggest relief measures.
The letter comes a day after news reports suggested that Vodafone Group said that its Indian venture may be headed for liquidation unless the government eases off on demands for mobile spectrum fees.
“If you don’t get the remedies being suggested, the situation is critical," Vodafone CEO Nick Read said at a press round-table in London on Tuesday. “If you’re not a going concern, you’re moving into a liquidation scenario—can’t get any clearer than that," Read said according to a report by Reuters on 12 November.
"Financially there's been a heavy burden through unsupportive regulation, excessive taxes and on top of that we got the negative supreme court decision," the Reuters report said quoting Read.
His statement come after Vodafone Idea and its arch-rival Airtel are fighting for survival having been dealt a body-blow after the recent Supreme Court verdict upheld the union government’s definition of revenue, which requires these telcos to pay past dues to the government -- Bharti Airtel’s dues are roughly Rs21,682 crore, while Vodafone Idea will need to cough up at least Rs28,309 crore. In contrast, Jio’s dues are just Rs13 crore. There is no other private operator left in the sector.
To be sure, following the court verdict, the Centre last month set up a Committee of Secretaries under the cabinet secretary to suggest measures to alleviate financial stress in the sector. The panel will look into the demand of telcos for deferment of spectrum auction payment dues for the years 2020-21 and 2021-22 in order to ease cash flow. It will also look at measures such as reducing levies, including spectrum usage charges and the universal service obligation fund (Usof) fee paid by telcos.
Cellular Operators Association of India (COAI) has sought an easier payment schedule for spectrum bought in previous auctions, waiving penalty and interest arising out of adjusted gross revenue (AGR) dues, and a 14-year period to pay the principal amount of AGR dues.