Lifeline for Voda1 min read . Updated: 02 Sep 2020, 10:36 PM IST
As some analysts have argued, Vodafone Idea could generate value if market conditions turn relatively benign, allowing it to raise tariffs. There are signs that user charges will head up again
Vodafone Idea Ltd had the most reason to be glum after Tuesday’s Supreme Court order granting telecom operators just 10 years to clear their adjusted gross revenue (AGR) dues in annual instalments, at an interest rate of 8%. With no profits in sight, financial injuries sustained in a telecom war and a debt pile of over ₹1 trillion, the company could hardly hope to borrow the sum needed to foot an AGR bill above half a trillion rupees. Yet, as it seems, all it took were reports of a board meeting scheduled on Friday, with equity raising options on its agenda, to stir up interest among a few global investors.
On Wednesday, news broke that US-based Amazon and Verizon were on the lookout for stakes in the telecom operator. As some analysts have argued, the company could generate value if market conditions turn relatively benign, allowing it to raise tariffs. There are signs that user charges will head up again. Also, there has been serious concern that since only three private players were left in this sector, each of them is too vital to fail. The exit of anyone would leave India’s tele-needful at the mercy of a duopoly, an outcome that would enjoin policymakers to take corrective action.