Vodafone Idea shares tumble 23% after India orders it to pay billions in dues

TechCrunch | 2/14/2020 | Staff
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Shares of Vodafone Idea fell by more than 23% on Friday after India’s apex court ordered the country’s second-largest telecom operator and Airtel, the third-largest telecom network, to arrange and pay billions of dollars in dues in a month.

In a strongly worded judgement, the Supreme Court rejected telecom networks’ application to defer paying historic $13 billion levies to the government. “This is pure contempt, 100% contempt,” Justice Arun Mishra told lawyers.

Order - Today - UK - Telecom - Giant

The order today, which may result in U.K. telecom giant Vodafone’s local joint venture’s collapse, saw Vodafone Idea’s shares plunge by 23.21%. Vodafone Idea had more than 336 million subscribers as of November last year, according to official figures (PDF).

The company did not respond to a request for comment.

Supreme - Court - Order - Direction - Department

The Supreme Court’s order was followed by direction from the Department of Telecoms to pay the dues by the end of Friday. The local ministry of telecommunications also ordered the telecom companies to keep their relevant offices open on Saturday to “facilitate” payments and answer queries.

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 a combined $13 billion in adjusted gross revenue as spectrum usage charges and license fees.

Government - Telecom - Operators - Decade - Revenue

The Indian government and telecom operators have for a decade disputed how gross revenue should be calculated. The government has mandated the license and spectrum fee to be paid by operators as a share of their revenue. Telcos have argued that only core income accrued from use of spectrum should be considered for calculation of adjusted gross revenue.

Commenting on the ruling, Airtel said that it would pay $1.3 billion by next week and the remainder (about $5 billion) before March 17, when the Supreme Court...
(Excerpt) Read more at: TechCrunch
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