BREAK POINT
TWO WEEKS AFTER THE Supreme Court’s judgement on adjusted gross revenues (AGR), which rattled the telecom sector, a Delhi-based top corporate lawyer, whose clients include the likes of Reliance Jio, Bharti Airtel and Vodafone Idea, was travelling to the UK for meetings with foreign lawyers who advise companies on overseas investments. The key takeaway from his meetings was that India is no longer an attractive investment destination in general. “Everybody was asking about the AGR judgement. They couldn’t believe that the liability of a court judgement is so huge that a telco of Vodafone’s size is mulling withdrawing from India,” the lawyer says.
Being one of the most litigious sectors, telecom was long seen as the El Dorado for corporate lawyers. But the recent chain of events has shattered even their confidence. Why? The amount that the telcos are liable to pay for the lost case runs into billions of dollars, and can potentially result in one or more telcos winding up. There are currently three private telecom companies and two public sector ones vying for the 1.19-billion Indian subscriber market.
It’s an existential crisis for legacy operators as they will have to shell out over ₹92,642 crore for licence fees and another ₹55,054 crore
