The company's ability to continue as a going concern is essentially dependent on a positive outcome of its modification application in the Supreme Court on the adjusted gross revenue (AGR) matter and any relief from the Telecom Department on payments, it said.
Rival Bharti Airtel's liabilities added up to almost Rs 35,586 crore, including licence fee and spectrum usage charge dues. For the head of Aditya Birla Group, Kumar Mangalam Birla who said that there is no point in good money following bad money, the tremors will be felt at the group level.
Vodafone Idea is staring at dues worth Rs 53,000 crore that includes up to Rs 24,729 crore of spectrum dues and another Rs 28,309 crore in licence fee, and the company had earlier warned of shutdown if no relief was given.
For example, Vodafone plc exited its USA joint venture Verizon Wireless for a consideration of almost $130 billion while it sold its stake in an Egyptian joint venture for almost $2.4 billion. Its shares rose 4.69% on Friday as the telecom operator is in a better position to pay and the prospects of it being only the second major telecom network to fight Reliance Jio, the top network run by India's richest man Mukesh Ambani . On the NSE, it dropped 18.88 per cent to Rs 3.65.
According to a reply filed by the government in the Rajya Sabha on February 06, the top four dues total a whopping Rs 1.3 lakh crore.
Airtel owes almost Rs 35,586 crore, including licence fee and spectrum usage charge, to the government.
The department of telecommunications (DoT) swung into action after a three-judge Supreme Court bench headed by Justice Arun Mishra expressed fury over the manner in which a DoT desk officer had issued an order that effectively stayed the operation of an apex court verdict handed down last October.
Airtel is expected to survive this crisis. Vodafone Idea had more than 336 million subscribers as of November previous year, according to official figures (PDF).
Bharti Airtel Ltd and Reliance Jio Infocomm Ltd now have the opportunity to win market share and enjoy an effective duopoly in the telecom sector. Highlighting their confidence, shares of Bharti Airtel settled 4.69% higher on Friday to a record, doubling in value in the past year.
The Supreme Court took strong exception to the manner in which a desk officer at DoT had allegedly tried to cut some slack to the cash-strapped, loss-laden telecom companies by asking the country's accountant-general to refrain from adopting coercive steps to recover dues. Justice Mishra said. "Is there no law left in the country?"
"We will draw up contempt against everyone", he said. The court also issued a contempt notice against the officer of Department of Telecommunications. The report said Deshpande's order of January 23 had been issued with the approval of DoT's member (finance) P.K. Sinha.
The Supreme Court asked the government to call the officer to court and questioned what action was being taken against him.
"We have dismissed a review plea in adjusted gross revenue case but still not a single penny has been deposited", Mishra said. "There is so much money power", he went on.
"Our conscience has been shaken by the way things are happening in the country".