Vodafone Idea crisis

Vodafone Idea stares at crisis after SC dismisses AGR review plea

After the Supreme Court dismissed the review petitions filed by Vodafone Idea in the Adjusted Gross Revenue (AGR) matter, the stock of Vodafone Idea crashed by as much as 34% on Friday.

The verdict even led to Bharti Airtel and Vodafone Idea showing humongous losses for the quarter.
Vodafone Idea, which had posted a net loss of Rs 50,921 crore in Q2 of FY 2019-20, the largest quarterly loss in India’s corporate history.(on the other side jio has reported  a profit of 1350 crores profit)
The company has an AGR liability of Rs 44,200 crore towards the government.

According to Rajiv Sharma, Head of Research at SBIcaps, if Vodafone Idea doesn’t have enough funds to pay its AGR dues by January 23, it may have to refer itself to the National Company Law Tribunal (NCLT) and could eventually result in the company shutting shop.

Even before Vodafone Idea posted massive losses, Vodafone CEO Nick Read said that Vodafone’s joint venture in India may soon have to be liquidated. He noted that the company’s future was in peril unless the Indian government provided relief on mobile spectrum fees.

Vodafone Idea’s survival is important for the market, because if it exits, it leaves the Indian telecom industry as a duopoly with Reliance Jio and Airtel. CCI (Competition Commission of India) may not favour it.

Now, it remains to be seen if the government comes forward to offer any relief to telcos, especially to Vodafone Idea crisis.

Question

1. Will SC order favor vodafone idea crisis?

○The company has the option to file
 curative petition.
○ CCI  won't encourage duopoly in the market.
○Nirmala Sitaraman would not allow the company to shut down the company as it will slow down the economy( unemployment,  increased Non Performing Asset etc)