regular-article-logo Thursday, 29 February 2024

Centre silent on Kumar Mangalam Birla offer

In a letter that became public on Monday, the Vodafone Idea chairman offered to hand over his stake in the company to a government-appointed entity

Our Special Correspondent New Delhi Published 04.08.21, 02:17 AM
Kumar Mangalam Birla.

Kumar Mangalam Birla. File picture

The Narendra Modi-government has maintained a studied silence on Kumar Mangalam Birla’s letter that became public on Monday in which the Vodafone Idea chairman offered to hand over his stake in the company to a government-appointed entity — a sign of the desperation that has gripped the floundering telecom giant which is battling a highly contentious tax demand and arguably inflated telecom dues dating back to 2007.

Officials of the department of Telecommunications were doubtful of a possible merger between Vodafone Idea Limited (VIL) and state-owned BSNL that would effectively mean the government taking over the gargantuan Rs 1.8 lakh debt of the private operator.


The officials said it was too early to decide on the merger. But it would be a hard decision as the government is committed to reviving the ailing BSNL, and taking over VIL at this stage would not be a prudent measure.

Analysts said the move had political implications. The Centre would be wary of being tagged as a government that socialises losses with taxpayer’s money when other operators were making profit — that will give fodder to an already inflamed Opposition that has been attacking the government relentlessly on the Pegasus spyware scandal .

On Tuesday, Bharti Airtel said it had made profits in the first three months of the current fiscal.

While Birla has offered his stake, it is not clear whether he wants to sell or give the stake free of cost to a government-appointed entity.

“I am more than willing to hand over my stake in the company to any entity — public sector/government/ domestic financial entity that the government may consider worthy of keeping the company going,” said Birla in a letter addressed to cabinet secretary Rajiv Gauba that was dated June 7 but came to to light only on Monday.

If VIL goes bust, analysts say, there will be a massive turmoil in the market not least from the pressure on the networks of the existing players that would have to absorb 25 crore subscribers.

Meanwhile, industry body COAI contended that a floor price for tariffs is absolutely critical and the need of the hour, given the “major financial stress” in the industry.

Airtel profit up

Bharti Airtel on Tuesday reported a consolidated net profit of Rs 284 crore for the June quarter against a loss of Rs 15,933 crore a year ago when the company had made provisioning for AGR dues.

On a sequential basis, Airtel’s net profit slumped over 62 per cent from Rs 759.2 crore in the March quarter — a result of higher finance and depreciation costs, and an exceptional gain in the previous quarter.

The total revenue surged 15.3 per cent year-on-year to Rs 26,854 crore. On a sequential basis, it was up 4.2 per cent.

Airtel clocked an average revenue per user (ARPU) of Rs 146 in the June quarter against Rs 145 in the preceding quarter and Rs 138 in Q1 2020-21.

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