Indian industrialist and Chairman of Vodafone Idea Kumar Mangalam Birla said the company would have to close the store if the government does not lend a helping hand to the ailing telecom sector.
Indian telecom player, Idea merged with Vodafone in August 2018 and employs about 12,500 staff.
Addressing a summit in New Delhi Birla said, “We will shut up shop if we don’t get relief.”
The share price of Vodafone Idea reacted sharply slipping 8.5% on the Bombay Stock Exchange immediately after Birla’s comments.
Vodafone-Idea owes $5.6 billion to the Indian government as per the Supreme Court order earlier this year on payment of revenue to the government for the spectrum that they use. The company has only half the amount as cash reserves.
Vodafone posted a loss of $7.20 billion in the third quarter of the current financial year.
Vodafone’s global CEO Nick Read last month complained that its India operations are on the brink of collapse due to “unsupportive regulations and excessive taxes”.
Read, however, retracted his statement within a day and wrote an apology letter to Indian Prime Minister Narendra Modi claiming that “some of the coverage has been distorted.”
Indian telecom major, Bharti Airtel is also in trouble due to the Indian Supreme Court decision, posting a loss of $3.20 billion in the third quarter.
Both Vodafone and Airtel have filed a review petition against the Supreme Court’s decision that requires them to pay about $20 billion to the government.
