TWO WEEKS AFTER THE Supreme Court’s judgement on adjusted gross revenues (AGR), which rattled the telecom sector, a Delhi-based top corporate lawyer, whose clients include the likes of Reliance Jio, Bharti Airtel and Vodafone Idea, was travelling to the UK for meetings with foreign lawyers who advise companies on overseas investments. The key takeaway from his meetings was that India is no longer an attractive investment destination in general. “Everybody was asking about the AGR judgement. They couldn’t believe that the liability of a court judgement is so huge that a telco of Vodafone’s size is mulling withdrawing from India,” the lawyer says.
Being one of the most litigious sectors, telecom was long seen as the El Dorado for corporate lawyers. But the recent chain of events has shattered even their confidence. Why? The amount that the telcos are liable to pay for the lost case runs into billions of dollars, and can potentially result in one or more telcos winding up. There are currently three private telecom companies and two public sector ones vying for the 1.19-billion Indian subscriber market.
It’s an existential crisis for legacy operators as they will have to shell out over ₹92,642 crore for licence fees and another ₹55,054 crore for spectrum usage charges (SUC) under the AGR dues. Although the demand has been made from 15 operators, over 70 per cent has to come from just three operators – Vodafone Idea, Airtel and the insolvent Reliance Communications. Many of the other penalised operators have already shut shop.
“We consider the recent SC decision on AGR a big event for the India telco sector which could turn it into a dominant two-player market between Airtel and Jio,” Bank of America Merrill Lynch said in a November 13 report.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Pension Scheme - Safety Net
The move to introduce the UPS has evoked mixed reactions. Analysts believe its funding will have limited impact on the fiscal math
The Reit Choice?
Real Estate Investment Trusts (Reits) Are Gaining Traction As Interest Rates Stabilise. But Returns Could Be Affected By Adverse Economic Conditions And Market Volatility
CORPORATE - Calling to Account
The sudden exit of Byju's auditor BDO marks the latest in a long series of setbacks for the edtech firm
EMPLOYMENT: Skills Push
The skill development ministry plans to partner with the UGC to improve the employability of undergraduates
Building on a Vision
L&T'S CHAIRMAN EMERITUS A. M. NAIK HAS BUILT A MAMMOTH ENTERPRISE THAT IS BUILDING A NEW INDIA, FROM ITS METRO RAIL SYSTEMS TO THE RAM TEMPLE
"KYS more important than KYC"
Vijay Kedia is a renowned equity investor; the value of his listed portfolio stands at around ₹1,750 crore
ROXX STAR
THE THAR ROXX COMBINES LUXURY WITH PERFORMANCE TO MAKE A STRONG STATEMENT IN THE MID-SIZE SUV SEGMENT
HIT THE GROUND RUNNING
Smartwatches have become indispensable tools for runners, offering real-time insights into pace, distance, heart rate, and more. Here are a few you can consider
TURNING THE TABLES
INDIA'S FURNITURE MARKET IS POISED FOR A GLOBAL TAKE-OFF. ALREADY, A HOST OF GLOBAL BRANDS HAVE MADE THE COUNTRY THEIR HOME, BUT INDIAN COMPANIES ARE NOT TOO FAR BEHIND
THE EVOLUTION OF ATHERA
IDENTIFYING OPPORTUNITIES IN ADVANCE HAS STOOD THIS BENGALURU-BASED VC FUND IN GOOD STEAD. NOW, WITH A HEIGHTENED FOCUS ON TECHNOLOGY, IT WANTS TO SUSTAIN THE SUCCESS