Posted on 01/12/2020 3:46:11 PM PST by Zhang Fei
NEW DELHI (Reuters) - The Indian government's win of a long-contested dispute over telecom fees could end up a Pyrrhic victory, as the billions of dollars in levies now owed are seen as burdens too big to bear for two of the country's three main carriers.
Vodafone Idea Ltd , India's biggest carrier by user numbers, is widely regarded as most on the ropes, with parent Vodafone Group ( VOD ) calling the situation "critical" after the unit was saddled with about $3.9 billion in fresh payments due.
That is the biggest portion of the $13 billion incurred by the sector after India's Supreme Court last month sided with the government in how spectrum usage and license fees are calculated.
Bharti Airtel , the No. 3 provider which must pay roughly $3 billion under the ruling, has also flagged distress, saying the decision casts much doubt on "its ability to continue as a going concern."
To industry executives and analysts alike, there's only one solution for the sector which was even before the current crisis debt-ridden and battered by a brutal price war: significant government financial support.
Hopes have been raised after the government deferred upcoming spectrum payments for the next two financial years until March 2022. Finance Minister Nirmala Sitharaman also said this month that relief is under consideration although no final call had been made.
"If the government does provide some measures, there is still some chance for (Vodafone Idea) to continue as a going concern. It all depends on what kind of relief measures the company will get," said Umesh Mehta, head of research at Samco Securities.
He said he expects the company to survive as it is in the government's interest to have three main players to ensure sufficient competition in the sector.
(Excerpt) Read more at reuters.com ...
Oh no! They are not going to lay off Peggy are they?
[Oh no! They are not going to lay off Peggy are they?]
Foxconn's expansion in India is at best on hold (which figures, they're making iPhones, on hold, I kill me).
Communist wealth seizure via lawsuit.
Government won’t let them charge more but wants to charge them more taxes, sounds like Democrats
the article is talking about wireless telecoms like Vodafone.
India has the lowest priced for the same quality mobile phone set up in the world. 1 gigabyte (GB) of mobile data costs $0.26 in India (£0.20), compared with $12.37 in the US, $6.66 in the UK, and a global average of $8.53. And voice costs are free for incoming, and very, very low for outgoing. One month at the cheapest levels in much of the USA would suffice for a year in india or more
The government actually forced them to RAISE tariffs about 40% from the ridiculously low levels they had got to. They are still ridiculously low. I pay approx $2 equivalent per month for unlimited voice all over India and 1.5GB 4G data per day. But 40% more would still be $2.80 .
So you only pay the tariff, nothing for service? Funny way to describe billings
95% of all connections in India are prepaid. $2 equivalent is all I pay per month, incl 18% tax. I pay about $23 per year in advance which saves me the bother of recharging every month .Insulates from any price increases too in that period. Can call my daughter over in Spain over Whatsapp too. How I use the data is up to me.
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