InvestorQ : What is the outlook for Vodafone Idea after the recent statements by Vodafone UK that they want to wind up Vodafone India? Is it likely to be wound up?
manisha Kolvenkar made post

What is the outlook for Vodafone Idea after the recent statements by Vodafone UK that they want to wind up Vodafone India? Is it likely to be wound up?

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Mahima Roy answered.
2 years ago
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In the light of the recent losses made by Vodafone Idea over the last few quarters and the recent government decision on the AGR penalty of Rs.44,000 crore on Vodafone, the CEO of Vodafone UK had recently indicated that the contribution of Vodafone India to its overall market value was almost zero. It is not adding any value for the parent company as it is getting very expensive for Vodafone to run their operations in India.

Over the last 3 years since Jio was launched in India, Vodafone has been facing a serious problem of falling ARPUs and it now has the lowest ARPUs in the telecom industry in India. That has meant losses quarter after quarter and the company has been on an average losing Rs.5,000 crore per quarter. In addition, the recent AGR charges of Rs.44,000 crore would literally push the company to shut down.

Recently, Mr. Birla met government officials including TRAI about helping the company to again revive and make profits. The problem is that Vodafone Idea owes nearly Rs.135,000 crore to the government and to the banks and this would mean a huge write off. As of now the situation is too unclear and you can only take a view based on how things pan out at the government policy end.

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sara Kunju answered.
2 years ago
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The Department of Telecom (DoT) has asked all telecom operators to clear all their dues in the span of three months as directed by the Supreme Court. I see the direct impact on stocks due to this recent notice to the sector. Following the notice, Bharti Airtel share shown a downward trend of over 3 % while Bharti Infratel fell nearly to 8 %. Vodafone Idea share prices sloped down to over 16%.
According to online reports, DOT has disclosed its estimation of total dues on the telecom service providers incurred due to SC order sums nearly to Rs. 1.33 trillion.

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