Telcos likely to get relief on AGR, spectrum rates by Apr
Govt may also review the base price for spectrum going forward
NEWDELHI: Telecom companies in India are set to receive a financial boost with the government preparing a relief package for the sector saddled with heavy debt and mounting losses, following years of intense competition and low tariffs.
The package is expected to be announced in April and will contain measures such as extension of the deadline for paying adjusted gross revenues (AGR) dues as well as a reduction in base prices for 5G spectrum auction, two people familiar with the matter said on condition of anonymity. “The contents of the package are being discussed at the highest levels. Some possible interventions could include a plan for staggered payments of AGR dues,” the first person said. “The package will take a comprehensive view of the sector keeping in mind the ambitious roll-out of 5G,” the person said.
A mechanism for providing cheap debt capital through a special purpose vehicle for enabling 5G auctions is also being discussed, the person added.
The government may also review the base price for spectrum going forward, both the people said, which could address a key worry of telecom firms who have complained that these prices are too high.
The relief package, if implemented, would be a lifeline to telecom companies, especially Vodafone Idea Ltd. The telco’s situation is so dire that chairman Kumar Mangalam Birla had warned last year it will have to shut shop without relief from the government.
With the Supreme Court order to pay dues hanging over the telecom operators and the department of telecommunications (DoT), the government is unlikely to reduce the penalty and interest owed by telecom firms in AGR dues, the second person said.
The Supreme Court had on October 24 passed a judgement under which it upheld the DoT’s definition of AGR and ordered telecom firms to pay levies based on that definition, along with interest on the principal amount and penalty. The liabilities included a principal amount for the 13-year period ended March 31, 2019 and interest up to February 2020.
The apex court also asked managing directors of the telecom companies to appear in person before the bench at the next hearing on March 17 if the dues are not cleared by then.
While the government’s initial estimates for Vodafone Idea’s and Bharti Airtel’s dues were more than ₹50,000 crore and around ₹35,000 crore respectively, a selfassessment by the two firms pegged their dues sharply lower at ₹21,533 crore and ₹18,004 crore respectively.
‘PAID DUES IN FULL’
Meanwhile, Bharti Airtel chairman Sunil Mittal on Wednesday asserted that the company has already paid its “full” adjusted gross revenue dues at about ₹13,000 crore.
Emerging from a meeting with telecom secretary Anshu Prakash
on Wednesday, Mittal said, “They said pay full .... we have paid full dues.”
“We have paid our full dues. It is in our letter ... which is about ₹13,000 crore, and ₹5,000 crore which is extra,” Mittal said.
Mittal said that the government had asked companies to self assess their statutory dues, which Airtel has already done and made payments accordingly.
“There is no versus...They asked us to self assess, we have self assessed and paid,” Mittal said.
The company had deposited an additional ₹5,000 crore as an ad-hoc payment to cover differences, if any, arising from the reconciliation exercise with the DoT.
PTI contributed to this story.