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The UK-based Vodafone Group said it has expedited a $ 200 million payment to the Indian telecommunications company Vodafone Idea, which was due in September 2020 under the terms of the Contingent Liability Mechanism (CLM) with Vodafone Idea .
“The Vodafone Group has accelerated this payment to provide liquidity to Vodafone Idea to manage its operations, and to support the approximately 300 million Indian citizens who are customers of Vodafone Idea, as well as the thousands of Vodafone Idea employees during this phase. of emergency health measures taken as a result of the COVID-19 pandemic, “the company said in a statement.
Vodafone Idea manages around 300 million odd clients and almost 14,000 employees.
Following the decision of the Supreme Court of India on the definition of Adjusted Gross Income (AGR) in October 2019, Indian telecom operators were held responsible for license fees, fines and interests that date back to more of 14 years. Vodafone Idea made payments to the Government of India in connection with its AGR obligations.
Under the terms of the Contingent Liability Mechanism (CLM), Vodafone Group is obliged to make payments to Vodafone Idea when the amounts paid in accordance with Vodafone India’s contingent obligations exceed those of Idea Cellular. The CLM came into effect at the end of the merger of Vodafone India and Idea Cellular in August 2018.
Earlier this week, Vodafone Idea featured on ₹Rs 1,367 million to the government for the payment of the license fee and charges for the use of spectrum (SUC) for the quarter of March 2020. It made the payment since no extension was granted in the term, after the Association of Indian Cellular Operators (COAI) submitted to the Department of Telecommunications (DoT) requesting an extension of the March 25 deadline for AGR-based payments due to stress on human resources over Covid-19.
Rajan Mathews, Chief Executive Officer, COAI also noted that telecommunication companies are playing a critical role in addressing the challenges faced by individuals, businesses, government services, emergency services and public services, etc. during the Covid-19 pandemic. There has been a severe disruptive impact on the global supply chain, demand and supply elements, and most importantly, on companies’ cash flows due to the slowdown in economic activities. This recession will impact all payments, including employee payments, interest, loan repayments, and taxes. “
