More

    Mukesh Ambani’s Reliance Jio Infocomm Ltd’s position remains unharmed

    Must Read

    Bollywood actress Tanisha Mukerji talks about creating her own green army to save environment

    Is in Parul University for interaction with students on enviormental issues "Social media...

    Swami Vivekananda statue defaced at JNU campus

    Objectionable messages were written on the Swami Vivekananda Statue inside the Jawaharlal Nehru University (JNU) campus targeting the Bharatiya...

    ISRO to Start Work on Chandrayaan-3, sets November 2020 as deadline to Land on Moon: Reports

    The Indian Space Research Organisation (ISRO), which suffered heartbreak in its attempt to land a probe on Moon, i.e...

     Mukesh Ambani’s Reliance Jio Infocomm Ltd. has come out largely unharmed supporting its position as the top operator in the world’s second-biggest market by users.

    India’s Supreme Court on Thursday ordered phone operators in the country to pay the government a combined 920 billion rupees ($13 billion) in past airwaves and license fees. The ruling came after a two-decades-old legal dispute between authorities and the companies over the payments.

    In a market already damaged by a price war since Jio’s 2016 entry with free calls and cheap data, the biggest loser from the verdict is Vodafone Group Plc’s India venture said to be Jio’s closest rival.

     The U.K.based operator and its Indian partner now need to pay the government a combined $4 billion, a huge burden for a carrier that hasn’t made any profit since announcing their merger in 2017. Bharti Airtel Ltd., the No. 3 carrier, faces a bill of $3 billion, compared with Jio’s $1.8 million.

    Underscoring the woes of the industry, Bharti Airtel and Vodafone Idea Ltd. have racked up a combined net debt of almost $28 billion and face billions of dollars more in spending on introducing 5G networks. Bharti Airtel, controlled by tycoon Sunil Mittal, reported its first ever loss in the quarter through June.

    “In case of full payment, VodaIdea will have no cash for capex or spectrum installments for next three years,” Jefferies said in a research note. “For Bharti, it will mean Although Jio, backed by the deep pockets of Ambani’s Reliance Industries Ltd. oil-to-retail combination, has spent $50 billion to build its nationwide network and had a debt of 840 billion rupees, it has reported quarterly profits this fiscal year after luring users away from Airtel and Vodafone. Reliance shares slipped 0.5% after rallying 3.2% on Thursday.

    Reliance Jio may be less hit than rivals by a one time demand in dues from the Indian government’s Department of Telecommunications (DoT), but the Supreme Court’s ruling on the revenue treatment of charges and fees could slow the segment’s profit growth.

    Jio generated 23% of Reliance’s Ebitda in fiscal 1H, a share that’s poised to grow.

    Additionally, Vodafone faces the prospect of a $2.2 billion tax bill linked to its 2007 investment of Hutchison Whampoa Ltd.’s Indian operations. The U.K.-based carrier’s Indian unit, which agreed to merge with billionaire Kumar Mangalam Birla’s Idea Cellular Ltd., is fighting a government demand that came despite a ruling in its favour by the nation’s top court in 2012.

    Vodafone Idea and Airtel have said they are disappointed with the ruling. The telcos may either appeal to a larger bench of the Supreme Court or ask the government to waive the penalties and interest or seek deferred payment options, Jefferies said.

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    - Advertisement -

    Latest News

    Bollywood actress Tanisha Mukerji talks about creating her own green army to save environment

    Is in Parul University for interaction with students on enviormental issues "Social media...

    Swami Vivekananda statue defaced at JNU campus

    Objectionable messages were written on the Swami Vivekananda Statue inside the Jawaharlal Nehru University (JNU) campus targeting the Bharatiya Janata Party (BJP).

    ISRO to Start Work on Chandrayaan-3, sets November 2020 as deadline to Land on Moon: Reports

    The Indian Space Research Organisation (ISRO), which suffered heartbreak in its attempt to land a probe on Moon, i.e Chandrayaan-2, in its first attempt...

    Tami Nadu: A train ran over through four engineering students sitting on tracks

    Four engineering students sitting on the tracks were run over by a train in Tamil Nadu’s Coimbatore on Wednesday late night, police said.

    Tirunelveli: The Land of Temples, Hills, and Forests

    Tirunelveli is one of the ancient cities in Tamil Nadu that receives many tourists throughout the year. When India was ruled by Britishers, this...
    - Advertisement -

    More Articles Like This

    - Advertisement -