Vodafone Chairman Gerard Kleisterlee, Chief Executive Officer Nick Read and Vodafone-Idea Managing Director and CEO Ravinder Takkar on Monday met telecom secretary Anshu Prakash at a time when the government is busy preparing for the upcoming spectrum auctions.
Vodafone Idea has been seeking a two-year moratorium on its annual spectrum payment citing debt and stress on balance sheet.
Talking to media after the meeting, Nick Read said, “We are absolutely focused on the integration of business between Vodafone and Idea.”
Both Read and Kleisterlee refused to comment on the outcome of the meeting with Prakash or the company’s future course of action in India.
This is the second time in a month that executives of Vodafone-Idea met government officials. Aditya Birla Group Chairman Kumar Mangalam Birla, in September, had called on telecom minister Ravi Shankar Prasad for deferring statutory payments in a sector that was not generating enough cash to even service loans.
Vodafone and Idea participated in five spectrum auctions in 2010, 2012, 2014, 2015 and 2016 before merging their businesses in August 2018. In the auctions, Vodafone acquired spectrum worth Rs 79,343 crore: the highest in terms of value compared to bids made by other operators. Idea purchased spectrum worth Rs 63,597 crore in the auctions.
Vodafone Idea’s net loss in the first quarter of the current financial year narrowed to Rs 4,873.9 crore for the April-June quarter, helped by a change in accounting standard and lower operating costs. Its revenue fell as some subscribers left and others moved to lower tariff plans.
The adoption the Ind AS 116 accounting standard resulted in a positive impact of Rs 120 crore in profit after tax (PAT) for the quarter.
Revenue for the quarter ended June fell 4.3% on quarter to Rs 11,269.9 crore, hurt by subscribers leaving due to the company’s minimum recharge plans.
The telecom sector has been battered by falling tariffs, eroding profitability, and mounting debt, in the face of stiff competition triggered by disruptive offerings of Reliance Jio, owned by Mukesh Ambani.
The industry has been seeking urgent relief measures for the troubled sector, entailing cut in levies like licence fee and spectrum charges, and release of GST input tax credit locked up with the government.