News of Seth Shiv Narayan Birla stepping down as CEO and Vodafone Idea is going to go bankrupt is all over the internet for the past few days. There is also the news that Vodafone Idea will their shares to the government for free. So today let us analyze what will happen if Vodafone’s Idea goes bankrupt.
Before we start analyzing, let us see why these promoters want to sell their companies or even give them away for free. Vodafone Idea has lots of debts and taxes to be paid to the government. The government has asked every telecom company to pay the AGR(all gross revenue) from the past years. I mean, this is bullshit. How can a government ask to pay tax for the money that they earned in the past? It’s like punishing a son because his father did some bad deeds. The money that the telecom companies earned in the past has already been used for development and as dividends. If they make a new law, they must say that telecom companies have to pay the tax starting from the year the law was passed. Due to this AGR due, Vodafone Idea has around Rs 61,000 crore (610 billion) in AGR dues. Moreover, Vodafone Idea has around Rs 1.8 trillion of debt to pay to the banks.
This is a huge sum of money and the government is looting money from the companies? They are strongly supporting Jio, backed by Mukesh Ambani. You may think that Mukesh Ambani is a good person for many of you as he gives the Internet free to use for about a year. But this is all a trap. Remember, about ten years ago, 1 GB of internet used to last for more than a month. But now, even 1.5 GB of data per day is not enough. He made us addicted to using the Internet and now we are forced to use it, even for studying and for work. Yeah, this is really good. He revolutionized India and make India a fully digital country. Here is his real intention.
After kicking out all the players in the telecom sectors like Vodafone Idea, Tata Communication, etc. he can increase the plans as Jio is the monopoly in the telecom sector. Also, the government is fully supporting Jio. If a new company is to give offers to attract customers, they can do it at a maximum of 3 months. For Jio, they give free Internet for 1 year which is illegal. Even when other companies like Airtel complained to the DoT, they don’t give a shit about this. You think giving free internet is good. Just think for a moment. As Jio is giving free internet, we all will use Jio SIM instead of others. Then, other telecom companies will go bankrupt as they don’t have many customers. Moreover, Jio is selling his plans at a loss. Since Jio is selling data so cheaply, competitors have no choice but to make their data plans competitive. So, they are getting a huge loss. If this continues for a long time, the telecom companies will die and Jio can increase its prices because everyone will be forced to use Jio as there are no other telecom operators. Jio will increase the price to such levels to make up for the loss they are making right now. And we can’t do anything as we need the Internet for many things and it’s a necessity. We simply can’t live without the Internet now.
Jio’s ideology is this. Give free internet to everyone and make everyone addicted to this. After, start selling plans and start recovering the money lose and make huge profits by increasing the prices of plans after killing all the competitors. This is the reality. For years, we don’t spend even Rs 100/month on the internet. Now, we using more than Rs 300/month. As per reports, it is expected that the data plans of Jio will be priced at least more than Rs 500/month for 1.5/day for 1 month. Currently, it’s only around Rs 200/month. This will happen as soon as Vodafone Idea dies.
Vodafone employs a lot of people. If it dies, many people will be unemployed and the country might be in chaos. This is because Vodafone has more than 2 lakh cores to pay to banks and governments. Of this, 1.8 trillion in debt for banks. If Vodafone Idea dies, this money will be lost and the bank will also suffer badly. This may create a recession in addition to the pandemic we are facing right now. So, the government must save Vodafone Idea by whatever means. Not only this, we are many investors investing in Vodafone Idea. IF it dies, they will lose their money. So, the dying of the Vodafone Idea is most likely to create a recession in India. The money lost will not be only Rs 2 trillion. It will include jobs losses, losses for investors and a huge amount of money will be lost. It may take many years to recover because of just one government mistake. This is my idea on how things will work out if Vodafone’s Idea goes bankrupt. It must be saved so that Jio doesn’t get the chance to monopolize the telecom sector. If Vodafone Idea goes bankrupt, it is us who will suffer.
Knowledge Glutton 