NEW DELHI: India’’s telecom sector is just a stone’s throw away from becoming a duopoly after the Supreme Court dismissed last-ditch pleas for relief from telcos on Friday. The move places a question mark over the survival of Vodafone Idea (VIL), which repeatedly warned that it may not be able to continue as a going concern in the absence of relief. VIL did not respond to requests for comment.
If VIL exits, it will leave just Bharti Airtel and Reliance Jio in effective competition, since state-run BSNL-MTNL remains in the doldrums. Analysts say VIL’s cash flow and balances indicate that it will not be able to meet its liabilities of Rs53,000 crore in one-go.
“Our ability to continue as a going concern is dependent on the positive outcome of the modification application filed in the apex court and the subsequent agreement with DoT for payment in instalments after some moratorium and other reliefs,” VIL had said just a day earlier, announcing a net loss of Rs6,439 crore for the quarter ended December 2019.
Vodafone Idea’s promoter groups — Vodafone Plc and the Aditya Birla Group — have also effectively ruled out any further capital infusion in the Indian company.