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Old 15th November 2019, 15:53   #16
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

Before it was Hutch (Hutchison Whampoa, Hong Kong), the Company was Orange. Back then, Hutch had a dynamic CEO in Mr. Asim Ghosh. The Boy and Pug revolutionized the advertising space with its neat concept (Ogilvy & Mather). Feel bad that such esteemed Company is caving in, and is now a penny stock.
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Originally Posted by srini1785 View Post
I remember that when vodafone was hutch (anyone remembers the pug?), it was a NRI CEO (don't remember the name ) who led the acquisition in spite of warning over the regulatory policies
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Old 15th November 2019, 16:14   #17
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

I have gone through the various websites but could not understand about this demand, except that its something on Income other than Telecom plus Interest and penalties. Can someone knowledgeable explain what's the core issue? What is Government demanding and why did these Telecoms not paid when it was due?

Last edited by Turbanator : 15th November 2019 at 16:20.
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Old 15th November 2019, 16:26   #18
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

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Originally Posted by Turbanator View Post
I ... paid when it was due?
To the best of my knowledge :
What the telecoms thought they had to pay : Charges for using spectrum and charges related to telecom.
What the government says : pay on your income also other that is generated by means other than telecom. This was not expected and hence telecoms went the legal way, and eventually lost. Eg : Pay on income generated by selling Apple phones via tie up with Apple. This is retrospective in nature and penalties + interest is being charged from 2003.

My even bigger worry is that if charges in this structure, then eventually even Jio will end up in similar state or will increase charges.

Last edited by aaggoswami : 15th November 2019 at 16:28.
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Old 15th November 2019, 16:53   #19
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

This is indeed a very unfortunate situation. Never ever should we kill the competition. We are in for a very disturbing times if we let Voda and Airtel die; the PSUs are almost dead by this time with hardly any patrons; thanks to the 'Sarkari' mentality. Jio, alone, will ruin us. We need to save ourselves by saving us from a monopolised market.
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Old 15th November 2019, 16:57   #20
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

My primary mobile number is from Hutch days of 2003. Overall I don't have much to complain about the services as such. We have an Airtel mobile connection also in the household and in terms of service I would rate Vodafone over Airtel any day. Both my parents are on BSNL and less said about the service the better.

There's also a Jio connection at home which gets recharged once in a while used on a free handset. I wasn't keen on getting this but got it a way at the insistence of my wife.

I don't have much to say about AGR issue because i don't understand it much. But if there is a single beneficiary in all this, it's Reliance Jio. Whoever's in charge of Reliance Jio, he must be really close to those in power to come out on right side of this mess. It's not a good sign if we are left with only one mobile service provider. It's unlikely that any new player will enter the field.

The predatory pricing ploy of Jio to provide data at dirt cheap rates had created multiple issues. On one hand the competition is getting killed one by one, and on the other hand the free data has given rise to hordes of people on digital world generating various kind of trash like fake WhatsApp forwards and what not.

Personally I am paying less for my monthly phone bill than what I was spending a decade back. I assume itís same for most. This itself is a clear indication of the problem.
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Old 15th November 2019, 17:02   #21
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

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Originally Posted by aaggoswami View Post
What the government says : pay on your income also other that is generated by means other than telecom.

Do you mean pay Income Tax or something else? I don't think they would have not paid the Income taxes on the income. Or does Government want some Royalties separately? Under what head and what's the logic.
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Old 15th November 2019, 17:07   #22
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

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Originally Posted by avishar View Post
Let us also not forget that the government is spending money in BSNL to get them upto speed and make them offer 4G services to customers. Infact, BSNL could also benefit from a failed Vodafone-Idea.
The government will not save BSNL, it will make BSNL profitable for eventual buyer. I have lost hope with the present government, their forefathers started the idea of selling PSU's to private companies. This government will just repeat the tradition.
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Old 15th November 2019, 17:12   #23
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

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Originally Posted by Turbanator View Post
Do you mean pay Income Tax or something else? I don't think they would have not paid the Income taxes on the income. Or does Government want some Royalties separately? Under what head and what's the logic.

Back in around 1999/2000, a new system was brought up by government or agreed by government and telecom operators. Under that new system, telecom operators agreed to pay some percentage (not sure how much percentage) of their revenue to government. Now telecom operators say that revenue from telecom services only should comprise of revenue percentage of which will go to government.

However, government says that all revenue earned by telecom operators will be considered the revenue, percentage of which has to be paid to government. Telecom operators didnt agree to it and were of the view that only revenue generated from telecom services should be considered for paying charges to government under the scheme of 1999/2000.

Telecom operators went to court and lost, and government is charging them since 2003 along with penalties and interest.
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Old 15th November 2019, 17:26   #24
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

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Originally Posted by aaggoswami View Post
telecom operators agreed to pay some percentage (not sure how much percentage) of their revenue to government. Now telecom operators say that revenue from telecom services only should comprise of revenue percentage of which will go to government.

Thanks for the details. And the courts sided with the Government

But if the Telecom's were aware of this agreement, how hard was for them to make a separate company dealing with other consumables like iphone or watches or whatever! Airtel Stores Ltd as an example and they could have let the other company do all such sales or is it not that simple?

Last edited by Turbanator : 15th November 2019 at 17:27.
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Old 15th November 2019, 20:06   #25
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

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Originally Posted by SilentEngine View Post

I don't have much to say about AGR issue because i don't understand it much. But if there is a single beneficiary in all this, it's Reliance Jio. Whoever's in charge of Reliance Jio, he must be really close to those in power to come out on right side of this mess.
The three SC judge panel that took the final decision was headed by Justice Arun Mishra who's known to be a pro-Reliance gentleman. Just search for "Arun Mishra Reliance" on Google and you'll find a-plenty articles of senior lawyers and other judges as well as corporates asking him to be removed from cases that involved Reliance (or its subsidaries).

Even TRAI's decision to impose the IUC charges post Jan 2020 is subject to a further purview by the same judge.

Note: The above are all basis rumors that have a strong and potentially true basis.
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Old 15th November 2019, 20:16   #26
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

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Originally Posted by avishar View Post
Let us also not forget that the government is spending money in BSNL to get them upto speed and make them offer 4G services to customers. Infact, BSNL could also benefit from a failed Vodafone-Idea.
A BSNL insider always used to tell me that there are unwritten orders from top, not to venture too much into mobile telephony /internet and let the field remain open for the ahem.. private player.

Quote:
Originally Posted by avishar View Post
However, the bigger question is, what is the government's role in ensuring health and fair-play in sectors? ....
If the government today tells telecom companies that there has to be a base floor in mobile data prices, will that be looked upon as interventionist?
Govt should have thrown the rulebook to the operator when they were offering free services in the garb of trial period. Nowhere in the world will this so blatantly overlooked.

It is like I have lot of money and open a kirana shop in my neighborhood and offer free rice dal etc. Soon the other kirana shops will have to close and then I start charging.
But opening a Kirana shop has low entry barrier so someone will quickly fill in the void when I start charging. But think of pan India telecom networks.



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Originally Posted by srini1785 View Post
I remember that when vodafone was hutch (anyone remembers the pug?), it was a NRI CEO (don't remember the name ) who led the acquisition in spite
The NRI was charismatic Arun Sarin. I think he did what was right at that time.
I remember reading an interview of his where he stated his dream job was to become CEO of Vodafone and he did achieve it.

On a related note, Vodafone bought the stake from Hutch. Hutchinson Whampoa is from Hongkong and they made a killing in India mobile story. Invested 1 billion and took away 14 billion selling to Voda.

Fordday.

Last edited by fordday : 15th November 2019 at 20:19.
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Old 15th November 2019, 20:29   #27
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

On the surface, it appears to be quite fair that one pays taxation and fees on the net revenues.

Earlier, the fees seemed to be based on revenues generated from core services. However, now the DoT insists the fees should include ALL revenue sources - revenues from core services + dividends, handset sales, rent and profit from the sale of scrap.

The fees appear to be high mainly because of interest, penalties, and outstanding dues as appears to be evident from this image below taken from here:

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Seems fair that way. Although I find it hard to understand that in spite of decades of benefits and profits, how come the survival itself becomes questionable in a year or two of hardship? The way the details have been portrayed, the hardship seems to have a legitimate basis.

Poor management, I think.
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Old 15th November 2019, 22:18   #28
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

Here is a different perspective on this scenario. Makes interesting reading.

I am not taking sides, just putting forth a different view.

https://www.news18.com/news/opinion/...g-2365657.html
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Old 15th November 2019, 22:20   #29
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

These players milked millions of customers over decades. I remember paying exhorbitant prices for measly Internet packages, and the validity of my prepaid packages dropping from 30days to 28days.

Now that it's their turn to pay up, they complain.

I say, karma records everything and it's back to bite 'em.
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Old 15th November 2019, 23:30   #30
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Default Re: Road ahead for Vodafone-Idea? Posted the highest loss in Indian history of Rs 50,992 crore

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Originally Posted by rakirank View Post

I am not taking sides, just putting forth a different view.

https://www.news18.com/news/opinion/...g-2365657.html
News18 is a part of Network18 which is directly owned by Reliance Industries which also happen to be owner of Jio
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