Vodafone CEO meets Indian minister to keep company afloat

VODAFONE GROUP chief executive officer (CEO) Nick Read on Friday (6) met Indian communications minister Ravi Shankar Prasad to discuss relief options to keep the company afloat in the south Asian country.

The chief of the London based telecommunications (telecom) group met the Indian officials after the country’s top court mandated dues pushing company’s Indian joint venture Vodafone Idea to the brink.

The meeting assumes significance as Vodafone Idea Ltd (VIL), where the British telecom giant holds just over 45 per cent stake, is staring at Rs 530 billion or £5.49bn in unpaid statutory dues, having paid only Rs 35bn in two tranches so far.

VIL has said its self assessment pegs Adjusted Gross Revenue (AGR) liabilities at Rs 215bn, which is just 41 per cent of what the government has estimated.

After the over half an hour meeting with Prasad, Read refused to comment on whether the British telecom giant will exit India, saying "no comments".

Read also met finance minister Nirmala Sitharaman earlier in the day.

Telecom companies, including Vodafone, in India are desperately waiting for a bailout package from the government after a Supreme Court order put their statutory liabilities at Rs 1.47 trillion, and all eyes have been on country’s department of telecommunication (DoT) for the much-needed breather to fix the AGR imbroglio.

VIL recently told the government that it would not be able to pay the full dues unless state support is extended to survive the crisis.

It had made a strong plea for setting off Rs 80bn of Goods and Service Tax (GST) credits, a three-year moratorium on payment of the remaining amount, which should be staggered over 15 years at a simple interest rate of six per cent, drastic cut in licence fee and fixing of a minimum price of calls and data.

The intensity of crisis being faced by VIL can be gauged from the fact that Vodafone Idea chairman Kumar Mangalam Birla has held multiple rounds discussions at the telecom ministry and finance ministry over last few weeks to look for a solution to keep the telecom operations on track.

In December, Birla had said VIL may have to shut if there is no relief on the statutory dues. Even Vodafone CEO Read recently made it clear that the situation in India is critical, following the AGR ruling of the Supreme Court.