The telecom tribunal has told the Department of Telecommunications (DoT) to adjust the excess Rs 755.52 crore collected from Vodafone Idea (Vi) – as part of its earlier merger-related liabilities – against its statutory licence fee and spectrum usage charge (SUC) dues, offering relief to the cash-strapped telco.
“…we hereby direct the respondent (read: Government of India) to adjust Rs 755.52 crore towards liability of this petitioner (read: Vi) for licence fee and towards spectrum usage charges (SUC) within 15 days from today,” the Telecom Disputes Settlement & Appellate Tribunal (TDSAT) said in an order, dated December 15, 2023.
ET has seen a copy of the order.
The Vi stock jumped nearly 3% intraday before closing around 0.4% higher at Rs 14.09 on the BSE on Monday.
Back in 2019, Vi had moved the telecom tribunal, challenging DoT’s Rs 3,926.34 crore demand towards spectrum liabilities linked to the merger of erstwhile Vodafone entities – Vodafone Mobile Services and Vodafone India --
with Idea Cellular five years ago. The government had subsequently recalculated Vi’s dues, and revised it downwards to Rs 3,170.82 crore.
But since Vi had already deposited “under protest” the Rs 3,926.34 crore demanded by the government, the tribunal has directed the latter to adjust the excess sum collected with Vi’s current statutory dues.
At press time, Vi did not reply to ET’s queries.
As per the TDSAT order, the initial Rs 3,926.34 crore demand, back in July 2018, had been linked to spectrum holdings (of the merging entities) below 4.4 MHz, “against the differential between the entry fee paid and market-determined price”.
“..approval was granted for merger of (erstwhile) Vodafone Mobile Services and Vodafone India with Idea Cellular, (but) this merger was approved subject to certain conditions and the total liability calculated by the respondent (read: government) was Rs 3,926.34 crore as per a communication, dated, July 9, 2018, the TDSAT, noted in its order. The Vodafone Idea merger was concluded in end-August 2018.
The joint venture between UK’s Vodafone Plc and India’s Aditya Birla Group has been battling cash flow issues amid a much delayed fundraise, which has held up much needed capex spends on its 4G operations and vendor payments. This has also resulted in the telco failing to close any 5G network procurement deals with vendors, which in turn, has delayed its 5G rollout even while bigger rivals like Reliance Jio and Bharti Airtel are set to go national with 5G services very shortly.
From that context, the favourable TDSAT verdict is a huge relief for loss-making Vi, which has been also struggling to clear its statutory LF/SUC dues to the Department of Telecommunications (DoT).
The government, which holds a 33.1% stake in the telco, has in the past accommodated Vi’s requests for delayed payments.
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