In a letter to telecom minister Ravi Shankar Prasad dated July 3, the body said that the carrier’s inability to raise funds shows its mismanagement of affairs in terms of operation and financial management and that Vi is “misleading” the government with incorrect facts despite having financially sound promoters.
“The Government cannot continue to extend benefits just to help and keep afloat one single company which is unable to manage its own affairs….It is submitted that this is a fit case for forensic audit of accounts for last 10 years at least to examine misrepresentation of facts to lenders or diversion of funds to delay or avoid payment of government dues,” the body said. ET has seen a copy of the letter.
“On the other hand, VIL should be advised to infuse additional equity in the company or make serious effort to raise additional funds by dilution of existing equity for fresh investment in upgradation of their network and increase its operational efficiency,” the body added.
ET had reported last week that Vi has written to the telecom department expressing its inability to raise funds due to the low tariff structure of the industry which was hurting the health of the industry. It is also seeking deferment of spectrum dues of Rs 8,292 crore coming up for payment in April, 2022.
Vi’s managing director Ravinder Takkar, in a recent earnings call, had said that the two-year moratorium of spectrum payments which ends this fiscal should further be extended until the financial health of the sector restores.
Telecom Watchdog countered Vi’s reasoning of low tariffs and related hurdles to raising funds, by citing examples of rival telcos Reliance Jio and Bharti who have raised an “unprecedented and some of the largest investments for technology companies anywhere in the world” in the last one year.
It added that Vi’s allegations of predatory pricing are baseless as “EBITDA margins of all telecom operators’ players in Q4 of FY 2020-21 were above 45 per cent which is considered healthy by far for any sector.”
The concessional rate of interest of 8% given by the government on adjusted gross revenue (AGR) payments arising beyond October 2019 is already hurting the exchequer by costing Rs 32,000 crore annually, it said.
The body pointed out that Vi is losing customers as the company is not investing in upgrading its network quality and lagging in adoption of new technologies like VoLTE.
They have the lowest 4G subscriber count and deliver minimum 4G data in the Industry.
“To illustrate another example of management inefficiency, even after three years of their merger, their network is not integrated which takes away the benefit of optimum utilisation of resources and reduction in operational costs,” it said.
