India looks for desperate solutions as Vodafone Idea says it can’t pay $4bn

Vodafone idea map.jpg

The Indian government has asked the telecoms industry how quickly it could move Vodafone Idea’s 300 million customers to Bharti Airtel, Reliance Jio or other operators.

The answer, according to reports from New Delhi today, is not very quickly. India has two number portability companies, Syniverse and MNP Interconnection Telecom Solutions, and they could handle 500,000 number changes a day between them – meaning the whole process would take 600 days.

The urgency of the need became apparent earlier today when Vodafone Idea told the government that it cannot pay the $4 billion it owes in spectrum and other charges. The loss-making company has already paid the equivalent of $488 million, but says that, faced with a debt of $14 billion, it can pay no more.

Even if the number portability companies – which share the Indian market geographically – could handle 300 million changes if Vodafone Idea closed down, the two big rivals do not have the network capacity to take on the extra customers.

The crisis began – in a market that was already shaky because of India’s low tariffs – when the government’s Department of Telecom (DoT) and the Telecom Regulatory Authority of India (TRAI) changed the basis on which they set their charges to adjusted gross revenue (AGR).

Vodafone Idea has already raised charges, by 50% in December 2019, to try to stem losses, and has asked for a further rise of even more – from US$0.07 per gigabyte to $0.48, with a minimum connection charge of $0.69.



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