AGR dues may result in 10,000 job cuts at Vodafone Idea

The telecom company is on the brink of going bankrupt.


Vodafone Idea may have to shut shop if it is required to pay all the pending adjust gross revenue (AGR) dues to the Government immediately. If this happens, about 10,000 people will be rendered jobless overnight as the entire telecom sector will be adversely affected. Needless to say that 30 crore subscribers will be inconvenienced.

The Supreme Court (SC) had ended a 14-year long legal battle in October, last year, by favouring the Department of Telecommunications’ (DoT) definition of AGR. Following this, the SC had directed all the telecom companies to clear their pending dues with the Government.

Earlier this week, Vodafone Idea paid up Rs 2,500 crore as part of its AGR dues, following which it also appealed the SC that DoT should not take any aggressive action by encashing the bank guarantees, as that would pose a hurdle to its operations.

Bharti Airtel and the Tata Group have also paid up a part of their dues amounting to Rs 10,000 crore and about Rs 2,197 crore, respectively. While the former still owes almost Rs 25,586 crore to the Government, the latter has also about Rs 13,800 crore yet to be paid. The deadline for clearance of all dues has been set as 17 March, by the SC.

Clearly, it is impossible for the telecom companies to clear all the dues in such a short period of time. If they do, they will end up having to wind up operations altogether, which will leave just two operators in the market.

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