Kumar Mangalam Birla’s intention to step down as chairman of vodafone concept Ltd was approved by the board of directors. The decision emphasises the gravity of the crisis that has engulfed the once-booming major industry. Birlan will be replaced by Aditya Birlas Group and telecom industry veteran Himanshu Kapania. In a letter to cabinet secretary Rajiv Gauba, he offered to sell his portion of the company to any government-approved organisation. In his letter, Birla justified the offer by noting vodafone Idea’s financial difficulties and potential insolvency.
The vodafone concept’s future is in risk, and the telecom sector appears to be headed for a duopoly. Policy reversals, negative court judgements, costly spectrum prices, and high licence fees have converted an industry that was once prospering into a graveyard for entrepreneurs. reliance The only company that has recently flourished is Jio Infocomm Ltd, which took market leadership from vodafone concept and Bharti Airtel Ltd within three years of existence.
Vodafone has been attempting to raise capital in order to pay off large regulatory debts due to the government in the form of licence and spectrum fees. It has to raise a total of 22,500 crores between December and April to pay off routine debt to lenders, AGR (adjusted gross revenue), and spectrum dues. It owes the remaining 50,399.63 crores on an AGR obligation of 58,254 crores, of which it has paid 7,854.37 crores. The company’s user base has plummeted, and it has lost market share to rivals Bharti Airtel and Reliance Jio.