Is Vodafone Leaving India? CEO Warns Of Shutdown; Refuses To Invest More Money
Vodafone-Idea, which commands 30% market share in the Indian telecom sector, is facing an existential crisis right now.
Vodafone CEO Nick Read has warned India of a possible shutdown, as they have lowered their expected income from India to zero, and is prepared to write-down approximately $1.1 billion of investment, already made.
And, there is more; Vodafone has refused to invest more money into their Indian operations, and this is a big hint, that they may leave India any moment.
Is Vodafone Leaving India?
During a press round table in London, Vodafone Group CEO Nick Read has termed the situation in India as ‘critical’, and have warned that they may leave India, and shut down entire operations.
Recently, Vodafone merged with Idea, wherein they have 45% share in the combined entity.
Nick said, “If you don’t get the remedies being suggested, the situation is critical. If you’re not a going concern, you’re moving into a liquidation scenario—can’t get any clearer than that.”
‘Liquidation scenario’ can be translated to a possible shutdown of operations. Earlier this month, another set of reports emerged which predicted that Vodafone may leave India ‘any moment’ now.
Vodafone Idea has already have a debt of $14 billion in India, and now, their CEO has refused to put in more money into their Indian operations.
What Vodafone Wants From Govt?
Recently, Govt of India ordered Vodafone and other telcos to pay $4 billion of the pending dues, which is being vigorously opposed. These dues are related with spectrum fees, and license fee, paid by Vodafone.
Now, Vodafone wants Govt to spread this payment over a tenure of 10 years, and lower spectrum fees, and associated taxes levied on them. A two year delay in the payment of pending spectrum dues has also been demanded.
A Govt. committee headed by cabinet secretary Rajiv Gauba is already reviewing the situation, and Vodafone hopes that the matter will be resolved,
If not, then exiting Indian operations seems the only way out for Vodafone.
Share prices of Vodafone-Idea was down by 6.25% at the time of writing.
We will keep you updated, as more details come in.