The Indian telecom sector just got a call from hell
- 2019-11-15 09:08
- By qz.com
The July-September quarter has dealt a body blow to the Indian telecom sector, already reeling under a bruising tariff war. Bharti Airtel and Vodafone Idea, India’s second- and third-biggest telecom service providers, respectively, announced unprecedented losses yesterday (Nov. 14). This was largely a result of the two setting aside cash to pay disputed dues to the government, following a supreme court order to do so. On Oct. 24, India’s apex court upheld the government’s broader definition of telecom firms’ revenue on which tax is levied. The ruling has resulted in a Rs92,000 crore liability for India’s telecom sector, Airtel and Vodafone Idea being the worst hit. The company, that shook up the sector with dirt-cheap data rates and free voice calls in 2016, continues to play rough against its rivals . Earlier this week, UK-based Vodafone Group’s CEO, Nick Read, said the company’s Indian operations were not healthy. Another airwave auction of 4G and 5G spectrum is scheduled to be held soon, and Vodafone, with an existing debt pile of $14 billion , may not be able to make much of it. Taking a Rs62,187 crore hit , Airtel now doubts its ability to continue operations in the long run. State-owned BSNL and MTNL are also teetering, following the entry of Jio which has pushed call rates to less than a cent in India.