Hot Deal Vodafone-Idea in danger of becoming a 'zombie' telco; may just about survive

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Vodafone-Idea in danger of becoming a ‘zombie’ telco; may just about survive:

The initial impression is that Vodafone Idea will struggle to manage this level of staggered payments, given that it owes over Rs 58,000 crore

The Supreme Court order brings some clarity to the telecom sector. The telcos will have to pay their AGR dues over a period of 10 years with the payment being made every February. The stock market reaction so far has been positive in terms of the Bharti Airtel stock rising, and negative for the Vodafone Idea stock, which has fallen sharply.

What does this do to the telecom sector? Reliance Jio (RJio) is fine and would have been fine anyway, regardless of the verdict. Analysts will need to examine the balance-sheets of Vodafone Idea and Bharti Airtel to see if they can handle the cash outflows.

The telcos were asking for a 15-year period; so this verdict will be somewhat disappointing but it could have been worse. The initial impression is that Vodafone Idea will struggle to manage this level of staggered payments, given that it owes over Rs 58,000 crore. Some analysts say that Voda-idea could need to double Average Revenue per User (ARPU) to meet the payments out of cash-flows. That is utterly unrealistic. Bharti Airtel, on the other hand, will be able to pay up without being pushed too hard. However, even Bharti Airtel will find it difficult to make other capex allocations while this commitment is hanging over its head. Hence, it may not be able to bid for 5G spectrum and build out 5G networks at the ideal pace.

Spectrum auctions for 5G may need to be postponed anyhow due to the pandemic disruption. But as of now, only Reliance Jio would be comfortable with bidding for 5G spectrum and it claims to have a home-grown 5G network solution, which will allow it to build out network quickly. All said, Reliance Jio is a clear gainer in the sector. Bharti Airtel should be able to cope and may also gain as subscribers migrate out of the Vodafone Idea’s network. On its part, Vodafone Idea is in danger of becoming a “zombie” telecom service, but it may just about survive. It’s unknown what the parents of Vodafone Idea will do because it would need large capital infusions to thrive under the current circumstances. The banks may be cautious about taking further exposures to the telecom sector, so raising debt from the market to settle the AGR may not be easy.

Post-verdict, the sector will therefore, continue to have three private players. But one of them will be at a major disadvantage compared to the other two. Of the other two, Reliance Jio will clearly be able to enhance its leadership position. Bharti Airtel may eventually gain as it eats into the market-share of Vodafone Idea and it can also hope to capture some migration out of the state-owned BSNL.

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Supreme Court exempts Bharti Airtel, Reliance Jio from paying Rs 40,000 crore AGR dues to Centre

Airtel and Jio have been using the spectrum of defunct telecom companies Reliance Communications, Videocon and Aircel.

“Shared operator telecom companies cannot be saddled with liability of past AGR dues,” the court said while passing a verdict on the payment of revenue by telecom firms to the government.

In its judgement, the top court gave Indian telecom firms 10 years to pay AGR dues to the government. However, 10% of the dues have to be paid by March 31, 2021, the court said.

Justice Arun Mishra said that the telecom firms must pay the dues in annual installments commencing from April 1, 2021, till March 31, 2031. The firms must also keep alive the adjusting bank guarantees until the payments are made.

60 Comments  |  
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https://cdn0.desidime.com/attachments/photos/634632/medium/6899281images.jpg?1598997810

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Let’s get ready for price hikes then. 💰

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FEKU is going to loot public through telecom way , only we users will be losers as usual

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drupal wrote:

FEKU is going to loot public through telecom way , only we users will be losers as usual

kon feku ?

current govt ?

yeh AGR ki suruwat Congress govt se hua tha.

BJP ne us parampara ko aage badaya.

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abhishek012 wrote:

kon feku ?

current govt ?

yeh AGR ki suruwat Congress govt se hua tha.

BJP ne us parampara ko aage badaya.

Man with fact

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abhishek012 wrote:

kon feku ?

current govt ?

yeh AGR ki suruwat Congress govt se hua tha.

BJP ne us parampara ko aage badaya.

Magar bjp to Congress se better thi ? Nai?
Agar vahi krna thaa to congress bekaar kse hui?

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jambui wrote:

Magar bjp to Congress se better thi ? Nai?
Agar vahi krna thaa to congress bekaar kse hui?

Sector wise business policies are framed keeping 10+ years in mind & not something which any govt can change just like that. That is also why it takes years to frame such policies.

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guest_999 wrote:

Sector wise business policies are framed keeping 10+ years in mind & not something which any govt can change just like that. That is also why it takes years to frame such policies.

But i dont see any substantial changes other than name change of policy? Already 6years of govt…. how much more time needed?

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Good riddance.
They are trying to recover their losses by charging for toll free 1800 numbers. Scammers.

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jambui wrote:

But i dont see any substantial changes other than name change of policy? Already 6years of govt…. how much more time needed?

70 years more and all will be ok

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If a govt. can’t prevent a critical sector converting to duopoly, its a shame

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I have some main balance should use it asap before they become rcom

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Majestic wrote:

If a govt. can’t prevent a critical sector converting to duopoly, its a shame

Don’t you know actually mota bhai is the government

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kirandr221996 wrote:

I have some main balance should use it asap before they become rcom

No need to fear, all telecom operators will hike tariff again

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Reliance Jio se 4G network par 3g speed Tak to di nahi ja rahi 5G ka Kya achaar dalega

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abhishek012 wrote:

kon feku ?

current govt ?

yeh AGR ki suruwat Congress govt se hua tha.

BJP ne us parampara ko aage badaya.

Ohh I see, Congrass ke kandhe pe rakh ab bandook chalegi ,
Congress ne kiye to ye Kam legit ho gaya
Congress to petrol par subsidy deti thi
Aur Feku ji 110% tax le rahe hai
Agar Congress ko hi follow karna hai to poori tarah Karo
Ye Kya bat Hui meetha meetha Mera and kadwa kadwa tera

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drupal wrote:

No need to fear, all telecom operators will hike tariff again

Time to buy jio packs and stagger them for next 1 year? smiling_imp

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cm4444 wrote:

Time to buy jio packs and stagger them for next 1 year? smiling_imp

I will buy Annual Airtel or idea pack not JIO

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idea user since more dan a decade now….feeling bad for it….once upon a time it was d best network

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drupal wrote:

Ohh I see, Congrass ke kandhe pe rakh ab bandook chalegi ,
Congress ne kiye to ye Kam legit ho gaya
Congress to petrol par subsidy deti thi
Aur Feku ji 110% tax le rahe hai
Agar Congress ko hi follow karna hai to poori tarah Karo
Ye Kya bat Hui meetha meetha Mera and kadwa kadwa tera

Pahele ja kar left-wing vs right-wing k Ideology padho aur samjho.

aur tum hamesa past me jeete ho,

Congress k time Gadiya (cars/trucks/buses) kam tha,

2016 me humne Paris Climate Change Agreement sign kiya ha.

https://en.wikipedia.org/wiki/Paris_Agr...nt

Govt sab ko directly yeh toh nhi bol sakta ha ki cars maat kharido, isilye petrol pe tax jada lete ha.

Public transport ka hamesa use karo.
Cab sharing ka use kiya karo (ha abhi covid-19 chal raha ha but hamesa toh nhi rahega).

Govt jo poor peoples or farmers k liye schemes late ha, uske paise aate kaha se ha ?
Modi govt khud he bola tha kahi par ki petrol pe tax itna jada jo lete ha uska use govt. schemes me karte ha.

humare desh ka bohot bada population middle class ha aur middle class log bhi ummeed karte ha ki hume bhi subsidy mile. koi mtlb nhi banta ha iska.

middle class ho toh ish baat ko accept karo, hum sab middle class family se ho kar khud ko rich dekhane ki try karte ha, isilye mahengayi dekhta ha har jagha.

mai yeh nhi bolta ki mahengayi nhi ha but middle class isko afford kar sakte ha but poor people nhi kar sakta ha. toh unke bare me soch k toh petrol pe 110% tax de do, nhi afford kar sakte ho toh Public transport ka use karo.

ab raha baat AGR ka toh, yaha pe har koi sahi ha. Congress bhi sahi tha, BJP bhi sahi ha, aaj k date me Telecom companies bhi sahi ha, Jio bhi sahi ha, Supreme court bhi sahi ha.

har koi apna place me sahi ha, toh galti kaha hua yeh janna ha toh telecom companies ko bas time se AGR pay karte rahena chahiye tha, jab paise the unke pas. Court me case chalte raheta but aaj aise problem toh nhi aate na.

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abhishek012 wrote:

Pahele ja kar left-wing vs right-wing k Ideology padho aur samjho.

aur tum hamesa past me jeete ho,

Congress k time Gadiya (cars/trucks/buses) kam tha,

2016 me humne Paris Climate Change Agreement sign kiya ha.

https://en.wikipedia.org/wiki/Paris_Agr...nt

Govt sab ko directly yeh toh nhi bol sakta ha ki cars maat kharido, isilye petrol pe tax jada lete ha.

Public transport ka hamesa use karo.
Cab sharing ka use kiya karo (ha abhi covid-19 chal raha ha but hamesa toh nhi rahega).

Govt jo poor peoples or farmers k liye schemes late ha, uske paise aate kaha se ha ?
Modi govt khud he bola tha kahi par ki petrol pe tax itna jada jo lete ha uska use govt. schemes me karte ha.

humare desh ka bohot bada population middle class ha aur middle class log bhi ummeed karte ha ki hume bhi subsidy mile. koi mtlb nhi banta ha iska.

middle class ho toh ish baat ko accept karo, hum sab middle class family se ho kar khud ko rich dekhane ki try karte ha, isilye mahengayi dekhta ha har jagha.

mai yeh nhi bolta ki mahengayi nhi ha but middle class isko afford kar sakte ha but poor people nhi kar sakta ha. toh unke bare me soch k toh petrol pe 110% tax de do, nhi afford kar sakte ho toh Public transport ka use karo.

ab raha baat AGR ka toh, yaha pe har koi sahi ha. Congress bhi sahi tha, BJP bhi sahi ha, aaj k date me Telecom companies bhi sahi ha, Jio bhi sahi ha, Supreme court bhi sahi ha.

har koi apna place me sahi ha, toh galti kaha hua yeh janna ha toh telecom companies ko bas time se AGR pay karte rahena chahiye tha, jab paise the unke pas. Court me case chalte raheta but aaj aise problem toh nhi aate na.

Achha BJP se pahle Poor’s ke liye scheme nahi thi ? Nai
Congress ke time gadi Kam thi isliye subsidy di gayee
Aur BJP mein gadiya aasman se tapak padi is liye petrol par 110% tax lagana pada wah wah funny logic

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Bhai……Bhakton ke lie bas ek hi shabd hai..

“aapka bhi katega”

“Andhbhakti in politics is dangerous” – BR ambedkar

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drupal wrote:

Achha BJP se pahle Poor’s ke liye scheme nahi thi ? Nai
Congress ke time gadi Kam thi isliye subsidy di gayee
Aur BJP mein gadiya aasman se tapak padi is liye petrol par 110% tax lagana pada wah wah funny logic

tab bhi tha govt schemes, but jada govt schemes nhi the jitne BJP ne schemes nikale ha.

uppar se mahengayi bhi badte raheta ha toh kharche bhi badhte ha.

ab mahengayi kyun badh raha ha iske uppar discussion maat start karo.

phir kisi din ispar baat karenge.

aur ispar maine galat kya bola, jo funny logic laga -

“Congress ke time gadi Kam thi isliye subsidy di gayee Aur BJP mein gadiya aasman se tapak padi is liye petrol par 110% tax lagana pada”

tum Paris Climate Change Agreement ko again bhul gaye.

maine 2017-2018 k bich ka kahi news padha tha, ki humare desh me 2018 me itne gaadiya badh gaye ki, 2017 me jitna petrol/diesel bika usse approx double bika 2018 me.

bohot se reason tum seriously nhi lete ho

1) Paris Climate Change Agreement (International pressure raheta ha India ko carbon dioxide emissions kam krne ka)

2) petrol/diesel India me nhi milta ha jo water k dam me milega and dnt compare with any other country, India ki population dekho phir bolna.

3) tax ka govt schemes me use hona

4) renewable energy ka use krna, bohot se India k place me diesel se electricity banaya jata ha, govt chahta ha renewable energy ka cost petrol/diesel se kam ho taki log renewable energy ki aur bade

5) Electric cars/bikes ki entry. humae pata ha 2030 me ja kar India me actually electric cars/bikes har kisi k pas dekhne mil sakta ha, uske liye petrol/diesel k price abhi se slowly slowly hike krna hoga. Suddenly 2030 me ja kar petrol/diesel k price hike nhi kar sakte ha. logo ko actually feel karwana ha ki petrol/diesel car/bike lena mahenga parega long term me electric cars/bikes k compare me. taki yeh changes slowly slowly ho.

last me yehi bolunga ek single reason nhi ha petrol/diesel k price hike ka, multiple reason ha, tum ek single reason ko le kar compare nhi kar sakte ho

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abhishek012 wrote:

tab bhi tha govt schemes, but jada govt schemes nhi the jitne BJP ne schemes nikale ha.

uppar se mahengayi bhi badte raheta ha toh kharche bhi badhte ha.

ab mahengayi kyun badh raha ha iske uppar discussion maat start karo.

phir kisi din ispar baat karenge.

aur ispar maine galat kya bola, jo funny logic laga -

“Congress ke time gadi Kam thi isliye subsidy di gayee Aur BJP mein gadiya aasman se tapak padi is liye petrol par 110% tax lagana pada”

tum Paris Climate Change Agreement ko again bhul gaye.

maine 2017-2018 k bich ka kahi news padha tha, ki humare desh me 2018 me itne gaadiya badh gaye ki, 2017 me jitna petrol/diesel bika usse approx double bika 2018 me.

bohot se reason tum seriously nhi lete ho

1) Paris Climate Change Agreement (International pressure raheta ha India ko carbon dioxide emissions kam krne ka)

2) petrol/diesel India me nhi milta ha jo water k dam me milega and dnt compare with any other country, India ki population dekho phir bolna.

3) tax ka govt schemes me use hona

4) renewable energy ka use krna, bohot se India k place me diesel se electricity banaya jata ha, govt chahta ha renewable energy ka cost petrol/diesel se kam ho taki log renewable energy ki aur bade

5) Electricity cars/bikes ki entry. humae pata ha 2030 me ja kar India me actually Electricity cars/bikes har kisi k pas dekhne mil sakta ha, uske liye petrol/diesel k price abhi se slowly slowly hike krna hoga. Suddenly 2030 me ja kar petrol/diesel k price hike nhi kar sakte ha. logo ko actually feel karwana ha ki petrol/diesel car/bike lena mahenga parega logn term me Electricity cars/bikes k compare me. taki yeh changes slowly slowly ho.

last me yehi bolunga ek single reason nhi ha petrol/diesel k price hike ka, multiple reason ha, tum ek single reason ko le kar compare nhi kar sakte ho

Yr… Dont justify something which is outrightly wrong.

Jo bhi kehta ki thora hi price barha hai , unse nivedan hai ki ek raahat kosh banaye, jisme wo log paise daale,

And that fund will subsidise us, who are feeling the pinch of petrol price.

Haan, ek aur baat,
Aapka bhi jald katega,

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abhishek012 wrote:

limited spectrum hote ha.

10 companies kholne ka koi mtlb nhi banta ha.

MVNO operators hone chahiye like USA, China etc.

2 companies are also not good
Even if spectrum is limited, there are many things in picture, such as spectrum sharing, network slicing, etc. to handle these things

Missing