InvestorQ : Should the government intervene to save Vodafone Idea just like it saved MTNL and BSNL a few months back?
Neelam Naik made post

Should the government intervene to save Vodafone Idea just like it saved MTNL and BSNL a few months back?

Answer
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Priyanka N answered.
7 months ago


Well, there is a basic difference here. Both MTNL and BSNL are government companies and the government had no choice but to intervene. That is the not the case with Vodafone Idea, which is a private sector company and a joint venture between Vodafone of UK and the Birla Group. Clearly, the company is having more than its share of troubles. It has accumulated losses of more than Rs.90,000 crore in the last few quarters and there is an old tax dispute which is still pending. In addition, asking them to pay Rs.53,000 crore towards AGR dues would certainly push the company towards insolvency. What can the government do? To begin with, it needs to restrict itself to just collecting the basic AGR dues without the interest and the penalty component. Alternatively, it can scrap the penalty and defer the interest collection. One can argue that the telecom model was wrong but that is history. It would be better if the government intervened and saved these companies so that jobs can be saved, competition in telecom can be ensured and bank loans of Rs.120,000 crore have some chance of recovery.