Hughes India sounds alarm about duties

Hughes India sounds alarm about duties

There has been further fallout relating to the unpaid duties demanded of telecommunications companies in last October’s Indian Supreme Court judgement – for both Vodafone Idea and Hughes India.

It now seems that Hughes India, a division of US-headquartered satellite broadband provider Hughes Network Systems, is worried about the future of its operations.

Hughes' India unit provides services to defence, education and banking sectors in the country. It also owes some $84 million in duties, which, according to a letter apparently written by Hughes' India President Partho Banerjee, it cannot pay.

The upshot of Hughes being forced to close operations in India would not just be a hit to the jobs market. It could mean disruption to tens of thousands of banking locations and a number of satellite networks used by the army, navy and railways.

The dues, interest and penalties owed by Indian operator Vodafone Idea are even higher – around $3.9 billion – and a Vodafone Idea exit could put some 13,000 employees out of work and endanger billions of dollars in bank loans.

However, the prospects for Vodafone Idea have just got slightly worse. According to recent news reports from India, any chances that Vodafone Idea might be able to monetise its stake in infrastructure company Indus Towers after the much-delayed Bharti Infratel-Indus Towers merger in time to pay part of its AGR dues by the 17 March deadline set by the Supreme Court, are dwindling.

It seems that the merger needs to be cleared by the National Company Law Tribunal-Chandigarh and then taken on record by India’s Registrar of Companies, a process that could take a few more months.

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