Vodafone Idea shares tumble 23% after India orders it to pay billions of dollars in dues – TechCrunch

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Vodafone actions The idea fell by more than 23% on Friday after the Indian Supreme Court ordered the country's second largest telecommunications operator and Airtel, the third largest telecommunications network, to organize and pay billions of dollars in premiums. in a month.

In a heavily worded judgment, the Supreme Court dismissed the telecommunications networks' request to defer historic levies of $ 13 billion from the government. "This is pure contempt, 100% contempt," Judge Arun Mishra told lawyers.

Today’s order, which could lead to a British telecommunications giant Vodafone’s With the collapse of the local joint venture, Vodafone Idea shares fell 23.21%. Vodafone Idea had more than 336 million subscribers in November of last year, according to official figures (PDF).

The company did not respond to a request for comment.

The Supreme Court’s order was followed by a directive from the Telecommunications Department to pay premiums before the end of Friday. The local telecommunications ministry also ordered telecommunications companies to keep their relevant offices open on Saturday to "facilitate" payments and answer questions.

In October, the Supreme Court ruled that Vodafone Idea and Bharti Airtel, as well as several other operators, including some that are no longer operational, will have to pay the government within 90 days $ 13 billion in gross revenue combined in gross adjusted revenue in as spectrum usage fees and license fees.

The Indian government and telecom operators have argued for a decade over how to calculate gross revenues. The government demanded that license and spectrum fees be paid by operators as a share of their revenues. Telecoms operators argued that only basic revenues from spectrum usage should be taken into account when calculating adjusted gross revenues.

Commenting on the decision, Airtel said it would pay $ 1.3 billion next week and the rest (about $ 5 billion) before March 17, when the Supreme Court hears the case again. Its shares rose 4.69% on Friday, the telecom operator being in the best position to pay and its prospects being only the second major telecommunications network to fight Reliance Jio, the first most man-managed network. rich man from India. Mukesh Ambani .

In recent months, executives at Vodafone, headquartered in the United Kingdom, which owns 45% of Vodafone Idea, have declared that the group's telecommunications activities in India will close if the government does not provide any relief. . Vodafone Idea, which already has $ 14 billion in net debt, owes the Indian government about $ 4 billion in taxes.

Vodafone Idea president Kumar Mangalam Birla said in December that the company was heading for insolvency in the absence of government relief. "It makes no sense to put good money after bad," he said.

The past few years have been difficult for telecom operators in India, who have arrived in the country to secure a share of the world's second most populous market. But since 2016, they have lost tens of millions of subscribers after Ambani launched Reliance Jio and offered free data and voice calls for a long time, forcing all other companies to cut their rates.

Sidharth Luthra, senior attorney at the Supreme Court, said in a television interview that the court was entitled to make such a decision, but said that they should perhaps have considered the economic consequences of the decision that would have an impact on jobs and could disrupt the daily lives of people who depend on the services of a network.

Vodafone Idea is the most trendy topic on Twitter as early as Saturday morning (local time), as many expressed concern over the future of the telecommunications network and wondered if the service would remain operational for them.

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