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Telecom biz broken, Voda Idea on brink: Former finance secretary Subhash Chandra Garg

On AGR, the former secy has advised the govt to offer telcos a one-time settlement scheme to pay the principal due amount as per the AGR definition. "Alternatively, appoint a Board for Vodafone-Idea by ousting current Board on the lines of action taken in case of ILFS and DHFL and secure a moratorium of some time on servicing of loans and government dues."

ET Online|
Last Updated: Feb 19, 2020, 03.16 PM IST
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Subhash Chandra Garg
Vodafone-Idea is sitting on the edge of precipice- to get into the ditch of bankruptcy any day, according to former Finance secretary Subhash Chandra Garg.

Garg in a blog titled 'Rebuilding Telecom Business in India' said that the Indian telecom business is now broken.

"While the telecom service has become almost universal in the country and the prevailing tariffs in India are possibly the lowest globally, the businesses which deliver these services are quite broke. The telecom business is in bigger crisis that it was in 1998. Vodafone-Idea is sitting on the edge of precipice- to get into the ditch of bankruptcy any day," he wrote.

Garg opined that the crisis is not limited to AGR related issues. "The crisis is much larger and deeper."

"First, Telecom business- voice and data both- is headed towards becoming a duopoly (Jio and Airtel) with the remaining two players- Vodafone-Idea and BSNL-MTNL hurtling towards eventual shutdown, which might as well be an abrupt collapse," Garg said.

The unused spectrum of bankrupt Reliance and Aircel, massive fund infusion in BSNL and MTNL, and no show in 5G are other issues that creating a crisis in the sector, according to Garg.

On AGR, the former secy has advised the govt to offer telcos a one-time settlement scheme to pay the principal due amount as per the AGR definition. "Alternatively, appoint a Board for Vodafone-Idea by ousting current Board on the lines of action taken in case of ILFS and DHFL and secure a moratorium of some time on servicing of loans and government dues."

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