As the sword of Damocles hangs over Vodafone Idea, uncertainty continues to mire the Indian telecom sector which has seen fall of several telcos such as Etisalat DB, Reliance Communications, Sistema Shyam and Aircel.
The Supreme Court on October 24, 2019, ruled that statutory dues need to be calculated by including non-telecom revenues in AGR of telcos, leading to huge liabilities of Rs 1.47 lakh crore for telcos already hit by falling revenues due to fierce competition.
After facing the ire of the Supreme Court, the Department of Telecommunications asked telecom licence holders to clear entire AGR dues totalling Rs 1.47 lakh crore by the end of Friday.
Vodafone Idea Ltd, whose liability is estimated to be around Rs 53,038 crore including Rs 24,729 crore of spectrum dues and Rs 28,309 crore in licence fee, has already warned of shutdown if no relief is given. BofA Securities, in a note, noted “overhang on VIL” and questioned if India is inching towards a two-player market.