Vodafone to shut shop? SC asks pay dues immediately | Future of 10,000 employees, 30 cr subscribers a concern

vodafone in debt

The Hush Post|9:26 am|one-minute-read|

Vodafone Idea has made a loss of over 2 lakh crores in the last 10 years. It says, it will have to close the operations if the company has to pay all its dues to the government at once.

This would make 10,000 people jobless. It will inconvenience 30 crore subscribers, Mukul Rohatgi, the senior counsel for the company has said.

It would also have an effect on the whole telecom sector, wiping out the competition and leaving only two firms, he added.

Vodafone owes the government Rs 7,000 crore, which with interest, penalty, and interest on penalty would add up to between 23,000 and 25,000 crore.

The company has paid Rs 2,150 crore he said, adding, “The government should not rock the boat by encashing the bank guarantees, or the company should close tomorrow (Tuesday)”.

The Supreme Court order that telecom firms pay up all their dues to the government immediately has precipitated a crisis for the loss-incurring firms, he said.

“The companies have been telling the Department of Telecommunication that there is no way they can pay these dues overnight. And the government should also wake up to the situation, otherwise this sector which is very, very stressed, will have only two operators, which is like semi-monopoly, which is what we call oligopoly,” Mr Rohatgi said.

Over the last years, the telecom sector has been incurring huge losses just to stay competitive. A few companies had to fold up under debt.

Earlier on Monday, the Supreme Court refused to pass any order on Vodafone Idea’s proposal to pay Rs 2,500 crore by the end of the day and Rs 1,000 crore by Friday.

 

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