Vodafone pays India unit $200m to comply with obligations

REUTERS/Toby Melville

UK-based Vodafone Group said it has accelerated a payment of $200 million to Indian telco Vodafone Idea, which was due in September 2020 under the terms of the contingent liability mechanism (CLM) with Vodafone Idea.

“ Vodafone Group has accelerated this payment to provide Vodafone Idea with liquidity to manage its operations, and to support the approximately 300 million Indian citizens who are Vodafone Idea customers as well as the thousands of Vodafone Idea employees during this phase of emergency health measures, taken as a result of the COVID-19 pandemic,” said the company in a statement.

Vodafone Idea manages around 300 million odd customers and almost 14,000 employees.

Following the decision by India’s Supreme Court on the definition of Adjusted Gross Revenue (AGR) in October 2019, India’s telecoms operators became liable for licence fees, penalties and interest dating back over 14 years. Vodafone Idea made payments to the Government of India in relation to its AGR liabilities.

Under the terms of the contingent liability mechanism (CLM), Vodafone Group is obliged to make payments to Vodafone Idea where amounts paid pursuant to the contingent liabilities of Vodafone India exceed those of Idea Cellular. The CLM took effect at completion of the merger of Vodafone India and Idea Cellular in August 2018.

Earlier this week, Vodafone Idea submitted about 1,367 crore to the government towards licence fee and spectrum usage charges (SUC) payment for the March 2020 quarter. It made the payment as no extension in timeline was granted on the dues, after the Cellular Operator’s Association of India’s (COAI) submissions to the Department of Telecommunications (DoT) requesting an extension of the March 25 deadline for AGR-based payments due to the strain on human resources on account of Covid-19.

Rajan Mathews, Director General, COAI also noted that telecom companies are playing a critical role in addressing the challenges faced by individuals, corporates, governance services, emergency & utility services etc during Covid-19 pandemic. There has been a severe disruptive impact on the global supply chain, demand & supply elements and most importantly, on the cash flows of the companies due to the slowing economic activities. This downturn will have an impact on all payments including those of employees, interest, loan repayments and taxes.”

This article was first published on livemint.com.

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.