I got solution on Vodafone Idea getting insolvent
In last two decade, may be a more than dozen of companies got merged / out of business in Indian telecom sector. Even Tata’s (remember Tata Indicom and Tata Docomo) had gracefully exited
In past Vodafone wanted to come out with IPO for fund raising, but it did not happen. Then it got merged with IDEA. When Two loss making business come together, losses gets increase.
Jio challenged all telecom operators on technology and pricing as it build company prominently on equity and not resorted to debt / loan
Today Vodafone Idea has
Debt 99,000 crore
Yearly loss say 20,000 crore
License fee and spectrum outstanding dues say 30,000 crore to 40,000 crore
Vodafone Group chief executive Nick Read has made threatening / blackmailing statements. Asking for relief package or will exit India. I think this has become a norm, if business is not doing good, business owners goes to government for package, earlier this year we saw industry asking for GST relief.
After making this kind public statement, now who will give any more loan or goods / service on credit to Vodafone Idea?
Being in stock market, I keep analysing companies
Few months ago, I was thinking, Vodafone Idea will go Reliance communication way in two years time frame. With recent supreme court AGR ruling, we are seeing lots of noise
I don’t know what is intention of Vodafone Idea whether they want to continue business in India or discontinue business blaming government
Apparently it seems “Angur khatte hai (अंगूर खट्टे हैं)"
Becoming insolvent will affect everyone
Total say 150,000 crore at stake
Once Vodafone Idea become insolvent, it will affect banks lending money, revenues to government, employment to people, business cascading effect as well as business friendly image of India
I got a solution
Vodafone Idea AGR liability is said to be in range of 30,000 crore to 40,000 crore (including spectrum usage charge dues, penalties, interest)
For every crore amount forgone / relief by Department of Telecommunications (DOT), Vodafone Idea should bring in 6 crore equity
Say revenue forgone Department of Telecommunications (DOT) 20,000 crore and Vodafone Idea brings in equity capital to the tune of 120,000 crore
This should sort out all issues and we will have three main players in Indian telecom industry
Fingers crossed :D