New Delhi: Vodafone-Idea chairman Kumar Mangalam Birla on Friday said that the telecom venture would shut down if the Narendra Modi government does not provide relief that the company has asked for.
“We will have to shut shop,” Birla said on a query about the course of action for the company going ahead in the absence of government relief.
He was speaking at an interview session at the Hindustan Times Leadership Summit in New Delhi.
Also read: Modi Govt Objects to Vodafone CEO’s Remarks on India JV Being Pushed to Liquidation
Perhaps more importantly, Birla echoed comments made by Vodafone boss Nick Read that no new money would be invested in the company until some form of government relief is provided.
“There is no sense that good money should follow bad money,” he said.
#HTLS2019 | We will shut shop, says KM Birla if Vodafone Idea does not get government support pic.twitter.com/w8pozW5jxr
— CNBC-TV18 (@CNBCTV18Live) December 6, 2019
Birla said the company will have to opt for the insolvency route in the absence of relief. The telecom operator’s shares fell 9% after his comment, but then pared its losses.
India’s telecom industry has been in financial trouble for the last few years, with the advent of Reliance Jio triggering a price war. More recently, the Supreme Court’s verdict on ‘adjusted gross revenue‘ has dealt what many analysts are calling a devastating financial blow to the sector.