Kumar Manga Rambilla I’m off the board. Does this show what the Vodafone Idea will bring and how difficult it is for telecom players to operate in such an environment?
They are facing challenges in paying spectrum and competition is intensifying for Jio. I don’t think the future is uncertain. It looks pretty certain when it comes to the large payments that have to be made for spectrum use over the last few years. Very difficult given the number of types involved and the fact that they cannot get the right type of equity investment to scale up unless they can invest huge amounts of capital to compete. Looks like. Things look miserable for the time being, and even globally, most telecommunications circles usually end up as duopoly. This is almost natural for carriers. Birla’s next step seems to be to completely cancel the investment in the joint venture.
What does it mean for Kumar Manga Rambilla to resign? It approaches NCLT, liquidates and sells out to another investor. Vodafone PLC Do you have a greater stake?
Neither of the two promoters today seems to be interested in capitalizing the entity, but no one would want to invest such an overwhelming amount. I really have no choice. Even if a white knight came, he would want a return of capital, and unless they get such an overwhelming amount of optimism as well as capital, I do. I don’t think I’m going. I don’t think it’s actually happening, as existing shareholders are withdrawing or writing down their investments. In my view, it seems like the end of the road, and they will probably have to apply for liquidation at some stage.
Let’s take a look at some of the banks that have great exposure to Vodafone, given the fact that it could be the end of the road for Vodafone Idea. For example, PNB, SBI. Do you think the situation will be tougher for the Indian banking system as well?
I really don’t want to comment on bank exposure, but every lender to this entity could have a significant write-down. That seems to be a natural consequence.
If that happened, wouldn’t competition be a big challenge now?
I don’t even answer that question. My point is that telecommunications and airlines are very different industries. In fact, Telecom is quite different from most industries in that airlines can write off some of their debt, completely write off their capital, and reopen with five instead of 100. That is not possible with telecommunications. The reduced Vodafone cannot survive. So I don’t know why either of the competitors buys a company that has such a huge debt. I don’t really see much room for a white knight.
Vodafone Idea: Voda Idea: Seems to be the end of the Sandeep Parekh road
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