India's top court rejects telecom firms' plea on dues, shares hit (updated)

ICRA

23/07/2021 08:16

(Recasts)
    By Sankalp Phartiyal and Shivani Singh
    NEW DELHI, July 23 (Reuters) - India's top court rejected on
Friday a plea by mobile carriers seeking corrections of what
they called errors in the government's calculation of their
dues, leading to a slump in the shares of embattled Vodafone
Idea  VODA.NS .
    Last year, the Supreme Court gave telecoms companies 10
years until 2031 to clear dues owed to the government for use of
the airwaves and as licence fees, after they missed a January
deadline to pay roughly $13 billion.
    Friday's ruling is a setback to Bharti Airtel and Vodafone
Idea, which had approached the Supreme Court again this year,
urging a re-calculation, but will have greater impact on
heavily-indebted Vodafone Idea.
    Bharti Airtel and Vodafone Idea did not respond to requests
for comment.
    After the ruling, shares of Vodafone Idea fell as much as
14.6 percent to their lowest since October, while Bharti lost as
much as 2.6 percent before reversing course.
    Friday's decision does not "bode well for the recovery in
the sector," ratings agency ICRA said in a note, adding that
elevated debt levels and very low tariffs were likely to
lengthen the process.
    Vodafone Idea's net debt, at 1.8 trillion rupees was "high",
standing at 10 times its operating profit for the year to March
31, calculations by brokerage Yes Securities show.
    It is also losing subscribers at a time of talks with
potential investors to raise funds in a market disrupted by
Reliance Industries'  RELI.NS  Jio telecoms venture launched in
late 2016.
    Vodafone Idea has paid the government 78.54 billion rupees
in telecoms dues, regulatory filings show, but still owes
roughly 500 billion.
    Bharti Airtel has said it paid dues estimated at 180 billion
rupees, but government figures show it owes a further 259.76
billion.
    Jio, controlled by India's richest man, Mukesh Ambani, has
already paid off its smaller quantum of charges.
($1=74.4325 rupees)

 (Reporting by Sankalp Phartiyal in NEW DELHI and Shivani Singh
in BENGALURU; Additional reporting by Suchitra Mohanty; Editing
by Clarence Fernandez)
 ((ShivaniSingh1@thomsonreuters.com; +91 89 6969 2349))