Is Govt Working On Porting Out 30 Cr Vodafone Idea Users To Airtel, Jio; Is This Plan B?

Is Govt Working On Porting Out 30 Cr Vodafone Idea Users To Airtel, Jio; Is This Plan B?
Is Govt Working On Porting Out 30 Cr Vodafone Idea Users To Airtel, Jio; Is This Plan B?

As per the reports coming in, the Telecom department officials have asked India’s two mobile number portability (MNP) service providers on how many porting requests can they process in a day, as the government evaluates contingency options in the eventuality that Vodafone Idea doesn’t survive the adjusted gross revenue (AGR) crisis.

How Did This Happen?

Thought, the officials in the Department of Telecommunications (DoT) though say that the government’s first priority is to make every effort to see that Vodafone Idea survives the present turmoil and that India remains a three-private sector player market. 

The Digital Communications Commission (DCC) – the highest decision-making body of the DoT – may discuss some steps on providing relief to stressed telcos such as Vodafone Idea on Friday.

The government was informed that at the most 500,000 customers can be ported out each day on a combined basis by the two MNP providers—Syniverse Technologies India and MNP Interconnection Telecom Solutions India, according to the sources.

While both companies didn’t respond to the queries so far.

How Would This Affect?

According to experts, this capacity though may prove grossly inadequate to cater to over 300 million subscribers of Vodafone Idea, leading to severe service quality issues, as the potential recipients—Bharti Airtel and Reliance Jio—don’t have adequate capacity to immediately absorb the massive influx to their networks.

Also, the contingency plan is complex too, since it will include how to ensure smooth port outs in bulks of thousands to the two remaining operators. 

The sources said “This will put tremendous strain on the systems. To handle bulk requests of so many million customers will be a big task and hence, a contingency plan needs to be in place. Also, the telcos will have to discuss what are the charges acceptable to them to take in so many customers”.

Further, MNP refers to the facility allowing a user to switch telco operators without changing the mobile number. 

As the recipient operator pays a fee to the MNP service provider for processing the request.

The SBICap Securities research head Rajiv Sharma said “This will be a panic like situation… right now telcos are operating at 70-80% of network utilization. Without additional spectrum, despite all the spectrum farming (reusing 3G spectrum for 4G), splitting one-third subscriber market between two operators will be very difficult.

What Is The Plan?

As there have been reports that both rivals have started discussing, how to upgrade their network in case Vodafone Idea goes down.

So far, Jio has 370 million while Bharti Airtel has 283 million subscribers.

Till now, Vodafone Idea has paid Rs 3,500 crore of the DoT’s estimated Rs 57,000 crore dues. 

Further, the telco estimates its dues to be around Rs 23,000 crore. 

Why Would This Happen?

According to experts, the cash-strapped carrier will find it difficult to pay even its own estimated dues in a short period of time.

Earlier, the telco has said it will be forced to shut down unless it gets some relief on its AGR dues. 

Also, the government is considering, among others, setting up a stress fund for stressed telcos to draw from to pay off AGR dues and repay on easy terms, besides deferment of license fees and spectrum usage charge (SUC) for a substantial period to free up cash flows.

Vodafone Idea dispatched a letter to finance minister, DoT and Niti Ayog on Wednesday, calling on the government to allow it to pay AGR dues over 15 years, after a three-year moratorium. 

Further, the telecom company has also asked for a tax refund to be adjusted against its dues, cuts in license fees and SUC and the establishment of a floor for tariffs, among measures to help remain viable.

Apart from that, the telco has also urged the DoT not to encash its bank guarantees against unpaid AGR dues, as that would force the telco to close down.

Also, having already rejected a petition seeking review of its October 2019 order, which said AGR should include non-core items, the Supreme Court’s hearing of the modification on March 17, which is also the deadline for payment of dues, assumes critical importance.

In the modification pleas, the telcos have asked to be allowed to negotiate modalities and timelines for paying the AGR dues with the DoT.

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