* Court asks telcos to pay 10% dues by March 31, 2021
* Vodafone Idea's longer-term problems not over
* Vodafone Idea shares fall as much as 25% on ruling
(Recasts, adds buy-side comment)
NEW DELHI, Sept 1 (Reuters) - Heavily indebted Indian
telecoms firm Vodafone Idea won some reprieve on
Tuesday as the country's top court gave mobile carriers 10 years
to settle government dues, but the company's longer-term
problems are not over.
Vodafone Idea and rival Bharti Airtel, two of
India's three major carriers, had asked India's Supreme Court
for 15 years to settle their fees.
Tuesday's Supreme Court ruling means companies will have
until 2031 to clear their dues, after they missed an original
January deadline ordering them to pay roughly $13 billion.
The court also asked telecoms firms to pay 10% of the
charges owed by March 31, 2021.
The dues refer to the amount that telecom providers must pay
to the Department of Telecommunications (DoT) for using airwaves
and in license fees.
Vodafone Idea - a joint venture between Britain's Vodafone
Group Plc and India's Idea Cellular - said in its
quarterly earnings statement on Aug. 6 that if it is unable to
pay its dues, that could jeopardise its ability to remain in
Tuesday's ruling gives it respite but the loss-making
company's financial pressures persist, according to telecoms
Vodafone Idea's shares plunged as much as 25% after the
ruling before closing down 13.2%.
"The window for Vodafone to raise funds, have better models
and give paybacks commitment is small which is adding pressure
on the stock," said Abhimanyu Sofat, head of research at
brokerage IIFL Securities.
Vodafone Idea has paid the government 78.54 billion rupees
in telecoms dues, according to regulatory filings, but still
owes roughly 500 billion to the government.
It reported its eighth straight quarterly loss in April-June
with its gross debt, excluding lease liabilities, at 1.19
trillion rupees ($16.31 billion).
Cut throat competition from Reliance Industries'
telecoms venture Jio Infocomm - which launched with free voice
and cut-price data in 2016 - hit Vodafone, which also lost
subscribers, in an ensuing price war.
Vodafone's customer base fell by 4.7 million to 309.9
million users in May, according to data from India's telecoms
Separately, the company also owes hundreds of millions of
dollars in payments for airwaves and interest on debt.
"They should have been given at least 15 years," said a fund
manager at a mutual fund which invests in Vodafone and Bharti
Vodafone Idea did not immediately respond to a request for
Bharti Airtel previously said it has paid all its dues which
it estimates at 180 billion rupees, but government calculations
suggest it still needs to pay another 259.76 billion rupees. Its
shares closed 6.5% higher.
"For Bharti Airtel, the (view) that Vodafone Idea is being
marginalized is beneficial for them," said Vivekanand Subbaraman
of research firm Ambit Capital.
India's newest carrier Jio, controlled by India's richest
man Mukesh Ambani, has already cleared its smaller backlog of
India's telecom providers have to pay the DoT nearly 3-5% of
their adjusted gross revenue (AGR) in usage charges for airwaves
and 8% of AGR as licence fees. They have long disputed the
definition of AGR but last year the Supreme Court upheld the
DoT's view that the AGR should include all revenue.
(Reporting by Suchitra Mohanty, Sankalp Phartiyal and Abhirup
Roy; Additional reporting by Chris Thomas and Philip George;
Editing by Ana Nicolaci da Costa and Susan Fenton)