More economic warnings from India’s telecoms players

More economic warnings from India’s telecoms players

The Cellular Operators Association of India (COAI) has again commented on the economic woes facing its members. But Vodafone has gone even further, suggesting that its Indian joint venture, Vodafone Idea, faces a critical situation.

In a barely veiled warning to the authorities, the COAI has suggested that the Indian government may well be within its rights to hold spectrum auctions in the current financial year, but that some operators may not bother bidding. It puts this down to the crisis in the sector and the additional burden of a supreme court ruling on statutory dues. Indian press reports that the government may consider lowering the reserve price of spectrum have not been officially confirmed.

Meanwhile, Vodafone, joint venture partner in India’s Vodafone Idea, this week posted a net loss of more than 2.1 billion euros in its first half, a performance apparently partly down to the supreme court judgement against Vodafone Idea, which will cost the Indian operator some $4bn.

Vodafone Group CEO Nick Read recently described the situation for Vodafone Idea and the industry in the country as "critical". Whether Vodafone can support the loss-making venture is unclear. London’s Financial Times newspaper has suggested that the future of the Indian joint venture is uncertain.

Read also commented to Reuters on what he called India's "unsupportive regulation" and "excessive taxes". Vodafone Idea is seeking relief from the government related to the supreme court judgement.

This is not a new situation; COAI warnings about the telecoms sector and pleas for lower spectrum and license fee charges have been a regular feature of news reports for at least 18 months. However, it does seem that the sector is under greater strain than ever and that, if it goes ahead, the 5G spectrum auction could be affected.


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