The Supreme Court verdict on adjusted gross revenue in telecom has dealt a huge blow to the operations of Vodafone Idea, severely battered by the vicious price war in the sector since the launch of Mukesh Ambani’s Reliance Jio in 2016.
The company on Thursday warned the latest verdict on the definition of telecom revenue will have “damaging implications” for the industry, and indicated it could explore filing a review application after legal consultation.
The Vodafone Idea stock hurtled downwards on Thursday and crashed nearly 27 per cent to hit Rs 4.15. The company had reported almost Rs 4,900-crore net loss in the first quarter (April-June 2019) even as UK partner Vodafone in May reported a massive euro 7.6-billion loss in 2018-19, which it blamed on the “disposal” of Vodafone India following the completion of the merger with Idea Cellular.
“We will study the ruling as soon as it is available, along with our legal advisers, to determine next steps. If there are technical or procedural grounds for doing so, this could include a review application,” the company said in a statement.
It said the verdict has “significantly damaging implications for the industry” that is reeling under huge stress.
Bharti Airtel on Thursday said the Supreme Court verdict on adjusted gross revenue will weaken viability of telecom sector, and the government must review its impact and find ways to mitigate financial burden on the already stressed industry.
Bharti Airtel said: “The TSPs have invested billions of dollars in developing the telecom sector and providing world-class services to consumers. This decision has come at a time when the sector is facing severe financial stress and may further weaken the viability of the sector as a whole”.