\tVodafone Idea expressed disappointment at what it termed a broad definition of adjusted gross revenue (AGR), which covers non-core activities, issued by India’s Supreme Court, noting it could seek a review of the decision.<\/p>\n
The judgement affirms the Department of Telecommunications\u2019 position and means all revenue, including non-telecoms related activities, will be considered AGR. Capital gains from the sale of assets and insurance claims, however, won\u2019t be included.<\/p>\n
In a stock market filing, the second-largest operator in India said: \u201cWe urgently request that the government engage on this matter in order to find ways to mitigate the financial stress for the industry.\u201d<\/p>\n
Vodafone Idea noted the case, which been going on for 14 years, had been through several rounds of litigation, which have been largely in favour of the operators.<\/p>\n
It added the judgement clearly has significantly damaging implications for the country\u2019s telecoms industry, which is already reeling under huge financial stress and is left with only four operators.<\/p>\n
Industry impact
\nSince licence and spectrum usage fees are calculated as a percentage of AGR, Vodafone would be on the hook for fees totalling more than INR400 billion ($5.6 billion).<\/p>\n
Rival Bharti Airtel said the judgement will hurt the viability of the sector, which is burdened by huge debt, The Economic Times reported. Including non-core revenue would mean it would need to pay an additional INR410 billion in fees.<\/p>\n
Given the industry\u2019s financial standing, Rajan Mathews, head of the Cellular Operators’ Association of India, told the newspaper the court ruling is a “disastrous blow”, adding: “The question that arises is whether this is the financial straw that finally breaks the back of operators.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Vodafone Idea expressed disappointment at what it termed a broad definition of adjusted gross revenue …<\/p>\n
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