Shares of Vodafone The idea went back more than 23% on Friday after the Indian Apex court ordered the country's second largest telecommunications operator and Airtel, the third largest telecommunications network, to arrange and pay billions in a month's fees.
In a strong ruling, the Supreme Court denied telecommunications networks' request to defer the government's payment of historic taxes of $ 13 billion. "This is pure contempt, 100% contempt," Judge Arun Mishra told the lawyers.
Today's order, which could lead to the British telecommunications giant Vodafone With the collapse of the local joint venture, Vodafone Idea shares fell 23.21%. According to official information (PDF), Vodafone Idea had more than 336 million subscribers last November.
The company did not respond to a request for comment.
The Supreme Court's order followed the order from the Ministry of Telecommunications to pay the fees by the end of Friday. The local telecommunications ministry also ordered telecommunications companies to keep their respective offices open on Saturday to facilitate payments and answer questions.
In October, the Supreme Court ruled that Vodafone Idea and Bharti Airtel, as well as several other operators, including some that are no longer in operation, must pay the government a total of $ 13 billion in gross adjusted gross revenue as license fees and royalties within 90 days.
The Indian government and telecommunications operators have been debating how gross revenue should be calculated for a decade. The government has mandated the license and frequency fee to be paid by operators as part of their revenue. Telecommunications companies have argued that when calculating adjusted gross revenue, only core income from using the spectrum should be considered.
Airtel commented on the verdict, saying that it will pay $ 1.3 billion by next week and the rest (about $ 5 billion) before March 17, when the Supreme Court re-hears the case. Its shares rose 4.69% on Friday as the telecom operator can pay better and there is a prospect that it is only the second major telecommunications network to fight Reliance Jio, the top network of India's richest man, Mukesh Ambani ,
In recent months, executives said Vodafone is headquartered in the UK, the 45% stake in Vodafone Idea that owns the telecommunications business of the group in India "close up shop" would be if the government does not provide relief. Vodafone Idea, which already has a net debt of 14 billion dollars, the Indian government owes duties amounting to about 4 billion US dollars.
Vodafone Idea chairman Kumar Mangalam Birla said in December that the company was heading towards bankruptcy in the absence of government relief. "There is no point in putting good money after bad," he said.
The past few years have been difficult for telecommunications operators in India, which have arrived in the nation, to secure part of the second largest market in the world. But since 2016, they have lost tens of millions of subscribers after Ambani Reliance launched Jio and offered free data and voice calls for extended periods of time, forcing every other company to cut their tariffs.
Sidharth Luthra, a senior lawyer at the Supreme Court, said in a television interview that the court had the right to make such a decision, but said that they might have had to take into account the economic ramifications of the judgment, which would affect jobs and could disrupt the daily lives of people who rely on the services of a network.
Vodafone Idea is from early Saturday (local time), the top trend topic on Twitter, as many people have expressed concerns about the future prospects of the telecommunications network and were worried whether the service would continue to be ready for them.