Vodafone’s India business isn’t facing everything alright it seems. The CEO confirms that, if the government denies its regulatory relief, the condition might become severe.
Quite a hoax was created around a week ago in across the Indian Telecom Industry which said that Vodafone is planning to quit Indian market. This created havoc amongst Vodafone users all around the country. Whereas customers were brought to temporary relief when it was assured by the parent company, Vodafone UK, that the rumours spread were unjustified and groundless. Vodafone CEO, Nick Read trusts that its business in India has a zero “carrying value”, presently. “If you don’t get the remedies being suggested, the situation might be critical”, quotes Nick Read, CEO Vodafone.
It has been found by various sources that Vodafone hasn’t been able to do a good business in the Indian Telecom Industry. The company confirms that the extreme regulatory scenario has made its existence quite troublesome, however, it also confirms that it has no immediate plans to exit from India very shortly.
Recent Bloomberg report also adds to the present condition of Vodafone saying its India venture is heading to a perilous position. The report directs that the organization may close its service in India if not cooperated by the Indian government in terms of relaxation on demand for mobile spectrum fees.
All that Vodafone users need to know is all these reports compile together to affirm that the continuous increase in losses faced by the company is going to harm its customers due to flickering aspects of capitalisation. And this also concerns the fading balance sheet of Vodafone in India.
Upperhand of Jio in the Indian Telecom Industry seems to threaten all of its rest counterparts, though Airtel has managed it well to compete hard. Now, what made Vodafone fall out of the competing line is the difficulties which it has faced in paying Adjusted Gross Revenue to the Supreme Court laid by the central government on Airtel and Vodafone. The amount rounds up to Rs 92,641. Out of which, 80,000 crores has been levied on Airtel and Vodafone, and a really less significant amount on Jio. This huge sum of money has grown tension in the company as it sweeps off the value which the company has put on its Vodafone-Idea joint venture. To handle this situation Vodafone has demanded a two-year extension for the payments of the spectrum and lower license fees from the Indian Central government. Adding to this is also requested to extend the spectrum payments period to be extended to 10 years waving off the penalties and interests levied upon the company.
After all these rumours spread, it’s okay to be a little perplexed by the arisen scenario, but all we have to say is even if Vodafone plans to shut down its India venture the process will take a good amount of time. It is obvious that in case the company decides to close, the consumers of the Vodafone would either be directly transferred to some other service provider or a new owner. The worst-case situation will be to altogether ask to switch to a new service provider itself. Keep calm for now, as your Vodafone number is going nowhere right now for a plentiful duration.
One who should really be concerned is the Indian Telecom Industry, as the downfall of Vodafone would bring out the duopoly of Jio and Airtel as such monopolies and duopolies are never found to be healthy.