August 10, 2022
india cabinet asked not to take proposal for telecom financial relief measures

India’s federal cabinet on Wednesday did not consider proposals to provide financial relief to the country’s cash-strapped telecom sector, a government source said.

The cabinet was widely expected to take a decision on a so-called relief package for the telecom industry, which would have helped all wireless carriers, but entangled Vodafone Idea in particular.

The source did not say why the proposal was not discussed.

Shares of Vodafone Idea were down 1.2 per cent, while Bharti Airtel was down 0.2 per cent at 0751 GMT (1:21pm IST) on news that the cabinet was mulling measures to support the industry.

On Tuesday, both the stocks had risen on the expectation of government help.

India’s telecom sector was boosted by tycoon billionaire Mukesh Ambani-controlled Reliance Jio Infocomm when it entered the market in late 2016 with free voice and cut-price data plans.

Jio forced many rivals out of the market, while others – such as the UK’s Indian arm of Vodafone and local Idea Cellular – were forced to regroup.

The sector was also hit by a Supreme Court ruling last year that forced Bharti Airtel and Vodafone Idea to give in to the government’s demand for dues, which they have long opposed.

Vodafone Idea has given Rs. 7,854 crore in telecom dues, regulatory filings show, but still stands at around Rs. 50,000 crores.

Bharti Airtel has said that it has paid an estimated Rs. 18,000 crore, but government figures show that a further Rs. 25,976 crores.

Vodafone, which has a net debt of Rs. 1,91,000 crore, had earlier raised serious concerns about its ability to survive without government help and its billionaire non-executive chairman stepped down last month.

© Thomson Reuters 2021

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