Govt considers lifeline for beleaguered industry

21 Nov 2018

The Indian government is considering a relief package for the debt-laden telecom industry, the Economic Times writes, citing people familiar with the matter. According to the sources, the development follows a meeting between finance ministry officials and Vodafone Idea chairman Kumar Mangalam Birla, during which the latter sought a deferral on an INR9 billion (USD126 million) payment related to spectrum, requesting to pay the figure over twelve instalments. After the talks, officials from the finance and telecoms ministries discussed the health of the industry and possible relief measures, with the government reportedly concerned about the potential impact on investor confidence if the nation’s largest mobile operator is unable to make payments. One government official was quoted as saying that the state does not want a default and that the ministries would ‘work out something’ adding that a staggered payment plan was a possible option.

As previously reported by TeleGeography’s CommsUpdate, Vodafone Idea registered a net loss of INR49.5 billion for the quarter ended 30 September 2018, whilst second-placed Bharti Airtel saw its net earnings for the same period shrink by 65.4% to INR1.2 billion. Indeed, the latter is reportedly looking to raise USD2 billion in loans and has suggested that it will stay clear of the upcoming 5G spectrum auction to focus on LTE services.