'Vodafone Idea shut down could impact PM Modi's 5 trillion dollar economy target'

Vodafone Idea Chairman Kumar Mangalam Birla on Friday said that telecom operator will have to shut shop in India if government does t provide any relief. Birla's comment has once again raised doubts on Vodafone Idea's future in India without relief from government. Following Birla's comment, Vodafone Idea shares fell more than 5 per cent on Friday.

Vodafone Idea's exit from India market will have an verse effect on country's investment targets and infrastructural growth for digital ecomy, says Kazim Rizvi, founder of Dialogue, an emerging policy think-tank.

"Vodafone’s exit could result in an extremely unlevel playing field. Moreover, it will limit consumer choice, services and could also hurt India’s investment targets, along with government losing out on a revenue stream," Rizvi told Republic World. "We must t forget that Indian telecom sector generates second-largest private sector investment in infrastructure in India today."

Vodafone or any or major telecom operator shutting down India operations can prevent Prime Minister Narendra Modi from achieving his five trillion ecomy target. "Exit by any of players will derail India’s infrastructural growth for digital ecomy, thus impacting five trillion dollar target of PM Modi," Rizvi ded.

Vodafone Idea slumps 5 per cent

On Bombay Stock Exchange (BSE), Vodafone Idea shares fell 5.34 per cent to close at Rs 6.92, hitting a low of Rs 6.66 apiece on BSE, tring 8.89 per cent lower over previous close. On National Stock Exchange (NSE), Vodafone Idea shares fell 5.48 per cent to Rs 6.90 a unit, hitting as much low as 8.9 per cent to Rs 6.65.

Last month, Vodafone Group CEO Nick Re h hinted that mounting debt on Vodafone Idea could result in company's untimely exit from India market. Raising doubts about Vodafone's future in India without AGR relief, telecom company chief, in a way, h issued an ultimatum to government.

In a temporary relief, centre has alrey anunced two-year spectrum payment moratorium for telecom operators.

Supreme Court of India upheld government's position on including revenue from n-telecommunication businesses in calculating annual justed Gross Revenue (AGR) of telecom companies, a share of which has to be paid as license and spectrum fee to exchequer.

Days after posting a quarterly loss of Rs 50,921 crore amid concerns on its survival, Vodafone Idea recently hiked its tariff rates by up to 50%.

(Main story picture credit: Getty)