AGR dues: Centre rules out any bailout package specifically for Voda Idea

Vodafone Idea has has maintained it would not be possible to continue as a going concern without any relief from the government on payment of AGR dues

A day before Vodafone Group Chief Executive Nick Read was scheduled to meet Union Telecom Minister Ravi Shankar Prasad, sources in the government said the relief, if any, would be for all and not just one player.

 

The UK-headquartered telco, which operates its India business in partnership with Kumar Mangalam Birla-led Idea, has maintained it would not be possible to continue as a going concern without any relief from the government on payment of dues linked to adjusted gross revenue (AGR).   

 

Read, who’ll be on a short visit to India at a time when Vodafone Idea is struggling to survive, is expected to meet Prasad, Finance Minister Nirmala Sitharaman and Home Minister Amit Shah on Friday. There’s no word yet on a meeting with Prime Minister Narendra Modi.

 

Ruling out any bailout package specifically for Vodafone Idea, an official said that the Department of Teleco­mmunications (DoT) was very clear that any step that the government may propose would be for the industry. “Relief measures for telcos will have to be approved by the Union Cabinet. Any relief, if at all, will be decided only after the March 17 hearing in the Supreme Court,” a source said.

 

It is learnt that several measures are being considered to ease financial stress in the telecom sector. The industry has sought government relief on the reduction in spectrum usage charge and licence fees, besides long-term staggered payment of AGR dues along with a moratorium.

 

Vodafone Idea has deposited Rs 3,500 crore in two tranches to DoT but is still assessing its full AGR dues. According to the government’s calculation, Vodafone Idea  owes more than Rs 50,000 crore in AGR dues. Tata Teleservices has paid Rs 4,197 crore, against the government calculation of Rs 14,000 crore of AGR dues.

 

Bharti Airtel, on February 29, had said it had completed assessing its AGR dues. According to the company's self-assessment exercise, its dues worked out to Rs 13,004 crore, which it has paid off. The company paid an additional Rs 5,000 crore to be adjusted later. The government estimate of Bharti’s AGR dues was Rs 35,500 crore.  On Wednesday, the DoT asked the telecom companies to make full payments in compliance with the Supreme Court order.

 

In a communication to all the 18 mobile service providers, many of which have gone out of business or sold to others, DoT has sought full and final dues as directed by the Supreme Court on October 24, 2019.