Consumer organization calls on government to reject Vodafone Idea’s call for help, calls for forensic audit, Telecom News, ET Telecom
In a letter to Telecommunications Minister Ravi Shankar Prasad dated July 3, the agency said the carrier’s inability to raise funds showed its poor management of the business in terms of operations and financial management and that Vi “was inducing in error âthe government with inaccurate facts despite sound promoters.
âThe government cannot continue to expand benefits just to help and keep afloat a single business that is unable to run its own businessâ¦. It is submitted that this is an appropriate case for forensic audit of accounts of the last 10 years at least to examine misrepresentation of facts to lenders or embezzlement of funds to delay or avoid payment of government contributions, âthe organization said. ET saw a copy of the letter.
“On the other hand, VIL should be advised to inject additional equity into the business or make serious efforts to raise additional funds by diluting existing equity for further investment in the upgrade. of their network and increase its operational efficiency, âadded the organization.
ET reported last week that Vi wrote to the telecommunications department expressing its inability to raise funds due to the industry’s weak pricing structure which was hurting the health of the industry. He is also asking for the postponement of spectrum royalties of Rs 8,292 crore to be paid in April 2022.
Vi chief executive Ravinder Takkar in a recent earnings call said the two-year spectrum payments moratorium that ends this fiscal year should be extended until the financial health of the sector. is recovering.
Telecom Watchdog countered Vi’s reasoning about low tariffs and fundraising hurdles, citing examples of rival telecom companies Reliance Jio and Bharti Airtel who have raised “unprecedented and among the largest investments. for the world’s technology companies’ in the past year.
He added that Vi’s predatory pricing claims are unfounded because “the EBITDA margins of all telecom operator players in the fourth quarter of fiscal year 2020-2021 were above 45%, which is considered by far to be healthy for any industry “.
The 8% concessional interest rate granted by the government on Adjusted Gross Income (AGR) payments beyond October 2019 is already hurting the public treasury by costing Rs 32,000 crore per year, he said. declared.
The organization pointed out that Vi is losing customers because the company does not invest in improving the quality of its network and lags behind in adopting new technologies like VoLTE.
They have the lowest 4G subscriber count and provide minimum 4G data in the industry.
“To illustrate another example of management inefficiency, even after three years of their merger, their network is not integrated, which deprives them of the benefit of optimal use of resources and reduced operational costs.” , did he declare.