Airtel board to decide on converting pending spectrum dues: Gopal Vittal

Airtel has asked the DoT for clarity on converting spectrum dues into equity under the 2021 reforms, but will wait for its board to decide on exercising the option

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Bharti Airtel Vice-Chairman & Managing Director Gopal Vittal on Wednesday said while a call on exercising the option of converting pending spectrum dues into government equity would be taken by its board, the company had reached out to the Department of Telecommunications (DoT) to confirm whether it could do so.

 

"On the adjusted gross revenue (AGR) conversion, it was simple. We just wanted a non-discriminatory level playing field in terms of an option to convert. Whether we will convert or not is a decision for the board. We wanted a clarification from the government on whether we had the option to convert or not," Vittal told analysts a day after the release of the telco's results for the March FY25 quarter.

 

Bharti Airtel became the second telecom company to reach out to DoT for converting its pending spectrum dues into government equity last month. Airtel’s move to avail of the Centre’s 2021 moratorium proposal came weeks after the government’s approval to convert financially stressed Vodafone Idea’s (Vi) outstanding spectrum dues into equity shares worth ₹36,950 crore.

 

According to government sources, the Centre continues to study Airtel’s request, considering that those who availed of the moratorium proposal under the terms of the 2021 telecom reforms package are allowed to apply for a conversion of dues into equity. "The requests are being looked into on a case-by-case basis. Airtel is profitable, unlike Vi. Everything will be considered," said an official in the know who did not wish to be named.

 

Airtel has booked major net profit jumps for three successive quarters. Queries seeking an official response from Airtel did not elicit a response. The telco's net profit rose 432 per cent year-on-year (Y-o-Y) to ₹11,022 crore in Q4FY25, against ₹2,071.6 crore in the year-ago period, as a result of telecom tariff increases in July last year, strong underlying momentum in India and sustained constant-currency growth in Africa.

 

As part of the telecom reforms package approved by the Cabinet in September 2021, the government had allowed a four-year deferment of annual payment of dues arising from the 2019 adjusted gross revenue (AGR) judgment of the Supreme Court. Scheduled annual payment of dues for spectrum purchased in past auctions was also deferred. It also gave financially stressed telecom service providers the option to convert a part of their debt owed to the government into equity.

 

The reforms package had allowed converting the interest on the moratorium into equity, which Vi opted for. It also kept the option open for the government to convert the moratorium principal into equity around the time when the four-year payment moratorium would end in September 2025. Airtel has applied for the same.