Aditya Birla Group is likely to let Vodafone Idea, their telecom joint venture with Vodafone, head towards insolvency if the company continues to drown in accumulated dues, The Economic Times reported.
Moneycontrol could not independently verify the report.
The company has to pay adjusted gross revenue (AGR) fees worth Rs 39,000 crore after the Supreme Court in October upheld the Department of Telecommunications’ (DoT) definition of the fee calculation.
This includes Rs 28,000 crore towards additional license fee and Rs 11,000 crore towards spectrum usage. Besides this, the apex court also ordered telcos to shell out the penalties and interest on both sections.
The paper quoted a group executive as saying that the Aditya Birla would rethink their capital allocation as the telecom business “seems to be making money for everyone else except the players”.
Agreeing on Vodafone CEO Nick Read’s November 13 comments that the company would need remedies from the government to resolve issues, the Birla source added that, in this difficult business environment, Vodafone Idea would only drag the group’s profitability.
In a turnaround, however, Vodafone Group has apologised to the government. Read stated that he was quoted out of context and appreciates the steps being taken by the Indian government, CNBC-TV18 quoted sources say.Birla Group and Vodafone Idea did not respond to ET’s queries.Are you happy with your current monthly income? Do you know you can double it without working extra hours or asking for a raise? Rahul Shah, one of the India's leading expert on wealth building, has created a strategy which makes it possible... in just a short few years. You can know his secrets in his FREE video series airing between 12th to 17th December. You can reserve your free seat here.