AGR verdict: Data could be the new Onion, Mr Ravi Shankar Prasad

The need of the hour could be to let Vodafone-Idea continue with the business providing them an extended rope to make the payments over a period of time, than to kill the "goose".

The Hon. Supreme Court on Friday rapped the telecom operators and ordered them to pay the adjusted gross revenue (AGR) dues by the stroke of midnight on Friday. This is akin to a “Death Warrant” for Vodafone-Idea. The legal system has to follow the rule book and is bound by law. However, it’s the executive which has to “think on its feet” and figure out the best solution for this situation from a holistic viewpoint, vis-à-vis nailing a “culprit”.

All eyes would be on the Telecom Minister, Mr. Ravi Shankar Prasad, who will need to think “out-of-the-box” than take the easy path of toeing the Hon. Court’s directive. Before shutting Vodafone-Idea, the Telecom Minister should figure out how to recover AGR dues from the corpses of telecom sector, viz. Reliance Communication (RCom), Aircel, Telenor, Sistema and Videocon. Not everybody comes with a rich pedigree like the Tatas, who are paying-off dues of Tata Teleservices through the parent Tata Sons.

Now, here is what would happen if Vodafone-Idea were to shut shop:

- Non-recovery of dues: It will defeat the very purpose of AGR, turning this imbroglio into a long-drawn process without any clarity on closure.

-Job losses: About 14,000 employees, along with numerous others who are directly dependent on Vodafone-Idea as casual workers, dealers, service providers etc. will suffer.

- Non-performing assets (NPAs): Nearly Rs 1.15 trillion could turn NPA. This could be another IL&FS-type event. Unlike other NPAs, the so called “assets” of a telecom company can disappear in thin air the day it shuts down. Additionally, who would shoulder the responsibility paying-off home loans, personal loans etc of the employees?

- Telecom tariffs: Most telecom players have already increased tariffs by about 40 per cent recently and should double to about Rs 300, as per CEO of Airtel, Gopal Vittal, for the sector to remain sustainable. However, in the event of demise of Vodafone-Idea, the tariffs can shoot up further within a short span.

- Porting: Some 30 crore Vodafone-Idea customers will need to the ported out of the network, leading to possible disruption of services and inconvenience. Porting customers are normally given a red carpet welcome, but the Vodafone-Idea customers may be treated as refugees.