VODAFONE – “THIS NUMBER NO LONGER EXISTS?”

about 7 months ago
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While the entire nation is divided over the alleged “encounter” killing of the four rape accused in Hyderabad, there is another disturbing news ( we seem to be having of this lately) – Kumara Mangalam Birla threatening to stop Vodafone Idea business if Govt does not provide it with any relief.

This comes close on the heels of talks of the company packing up and leaving. A few days after the rumours of its exit from India started, the Vodafone Group in the UK, on October 30, released a press statement calling the rumors baseless. It said that its India venture was going through challenging times but it wasn't looking at any exit.

And then the Supreme Court (SC) judgement came on the Adjusted Gross Revenue and post that, the CEO of Vodafone, Nick Read said, “If you don't get the remedies being suggested, the situation is critical. If you're not a going concern, you're moving into a liquidation scenario -- can't get any clearer than that."

So now what we can confer is that the Indian as well as global chief of Vodafone Idea are sure about one thing – no relief from Govt and they will go down and will be forced to quit. The decision of the SC over the AGR leaves Vodafone Idea liable for an estimated $4 billion in backdated fees, fines and interest.

And more worrying, the question being raised worldwide is whether it is worth doing business in India, lured only by the large population? This, coming when Modi is trying his level best to hard sell “Make in India” to the world and climbing up quickly on the Ease to Do Business ladder, is like one tight slap, pushing up back to where we began.

Apart from the huge beating we take on our reputation, the bigger problem is what happens to the space left vacant by Vodafone? Maybe some other buyer will buy (Jio?) or if no one buys, then it is worse because we will be left with only two players – Airtel and Jio. The PSUs BSNL and MTNL themselves are on ventilators.

Nothing can be worse for a sector than having a monopoly or a duopoly as it takes away the entire pricing power from the people. If we were having a good run with one of the cheapest mobile rates in India, prices have already started going up and if Vodafone shuts shop, it will only go up further. Internationally, what will be most certainly looked down upon will be the retrospective tax – the company and the Govt have been fighting over it for the past ten years.

It is sad that Vodafone has been put to such precarious business position due to uncertainty in Govt policy, confusions in the DoT and influence of a powerful lobby in India. Certainly, the nation will lose more in tele-services than the Govt. What is deplorable is that the Govt is leaving the public during this information age to the hands of mercy of few prominent industrialists.

Whether Vodafone quits or not, there are only two certainties now – our mobile bills will only go up henceforth and Jio will become the undisputed monopoly it is vying to become.

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