Is Vodafone leaving India? CEO says operation at risk of collapse

According to Vodafone’s Global CEO Nick Read, the company may head for liquidation of its India business if the government does not provide relief on its mobile spectrum fees.

A publication quoted Read who had called the situation critical, “If you’re not a going concern, you’re moving into a liquidation scenario — can’t get any clearer than that,” he said. Read also believes that the carrying value of Vodafone’s business in India is zero, citing “unsupportive regulation” and “excessive taxes” as reasons for the liquidation circumstance. While the telecom companies have been asked to pay a sum of Rs. 92,641 crore to the government, Rs. 80,000 crore needs to be paid jointly by Airtel and Vodafone. Vodafone has asked for a two-year extension on the spectrum payment, besides lower license fees and taxes. The company has further requested to span out the payment requirement demanded by the court over 10 years with a waiver on interest and penalties.

While the government has stated its desire to not end up with a monopoly, users of Vodafone need not worry about the situation, at least for now. In case the telecom company chooses to leave India, the customers apparently will be moved to another service automatically or in case they are asked to move to a different service on their own, they will be given a great deal of time to do so. If Vodafone does end up leaving India, Airtel and Jio will be the sole competitors, as MTNL and BSNL are in no form to challenge them.