Telcos get 10 years to pay India dues

Heavily indebted Indian telecoms firm Vodafone Idea won some reprieve on Tuesday as the country's top court gave mobile carriers 10 years to settle government dues, but the company's longer-term problems are not over, reports Reuters.
Vodafone Idea and rival Bharti Airtel, two of India's three major carriers, had asked India's Supreme Court for 15 years to settle their fees.
Tuesday's Supreme Court ruling means companies will have until 2031 to clear their dues, after they missed an original January deadline ordering them to pay roughly $13 billion.
The court also asked telecoms firms to pay 10% of the charges owed by March 31, 2021.
The dues refer to the amount that telecom providers must pay to the Department of Telecommunications (DoT) for using airwaves and in license fees.
Vodafone Idea - a joint venture between Britain's Vodafone Group Plc and India's Idea Cellular - said in its quarterly earnings statement on Aug. 6 that if it is unable to pay its dues, that could jeopardise its ability to remain in business.
Tuesday's ruling gives it respite but the loss-making company's financial pressures persist, according to telecoms industry executives.
Vodafone Idea's shares plunged as much as 25% after the ruling before closing down 13.2%.
"The window for Vodafone to raise funds, have better models and give paybacks commitment is small which is adding pressure on the stock," said Abhimanyu Sofat, head of research at brokerage IIFL Securities.
Vodafone Idea has paid the government 78.54 billion rupees in telecoms dues, according to regulatory filings, but still owes roughly 500 billion to the government.
It reported its eighth straight quarterly loss in April-June with its gross debt, excluding lease liabilities, at 1.19 trillion rupees ($16.31 billion).
Cut throat competition from Reliance Industries' telecoms venture Jio Infocomm - which launched with free voice and cut-price data in 2016 - hit Vodafone, which also lost subscribers, in an ensuing price war.
Vodafone's customer base fell by 4.7 million to 309.9 million users in May, according to data from India's telecoms regulator.
Separately, the company also owes hundreds of millions of dollars in payments for airwaves and interest on debt.
"They should have been given at least 15 years," said a fund manager at a mutual fund which invests in Vodafone and Bharti Airtel said.
Vodafone Idea did not immediately respond to a request for comment.