Cabinet grants Vodafone Idea five-year moratorium on Rs 87,695 crore statutory dues

New Delhi : The Centre has given significant relief to Vodafone Idea (Vi), freezing the financially struggling telco’s outstanding latest adjusted gross revenue (AGR) dues and simultaneously approving a five-year moratorium on payments.

The formal relief package approved by the Cabinet confirms ET’s December 15 newsbreak. Vi, however, told the exchanges it is yet to receive any communication from the government on the proposed relief, which people in the know said would be formally announced soon. Officials aware of developments told ET the Cabinet decided to freeze statutory dues of Vodafone Idea (Vi) at Rs 87,695 crore as on December 31. Payment of this amount has been rescheduled over FY 2031-32 to FY 2040-41. The frozen dues would also be reassessed by the telecom department, said people cited above.

Some Payments Ahead

Based on deduction verification guidelines and audit reports, this could further bring down the amount that needs to be paid by the telco, a relative industry straggler in which the government itself is now the biggest shareholder.


The company, however, has to pay AGR dues pertaining to FY17-18 and FY1819 over the next five years — from FY25-26 to FY30-31.

Vi shares hit a lower circuit after having hit a 52week high in the morning trade. The shares closed at Rs 10.76 apiece, down 10.85% on the BSE on Wednesday.

When asked by the exchange to clarify reports on the relief granted, Vi said: “We have not received any communication from the government in relation to the above reported matter. As and when there is any development which requires disclosure, we will do the needful.”

People cited said the government is likely to issue a letter with the relief details to Vi in the coming days.

COURT ORDER

The Supreme Court order on AGR dues came in October 2019 and it accounted for dues until FY17. Based on the order, the DoT calculated dues for FY17-18 and FY18-19 also and raised the demand for payment by telecom firms including Vi and Bharti Airtel.

In September 2021, the government granted a 4-year moratorium on AGR dues till FY18-19 to telcos, which included dues of the apex order. The moratorium ends with this fiscal. Now Vi has got another 5-year moratorium for AGR dues till FY16-17, and the company has to pay for the FY17-18 and FY18-19.

Apart from the moratorium, the government also approved equity conversion for AGR dues, following which the government now holds 49% stake in Vi. Aditya Birla Group and the UK’s Vodafone Group Plc hold 9.50% and 16.07%, respectively, in the telco.

The relief, however, is meant for Vi only, and Bharti Airtel has to pay its statutory amount as scheduled. Justifying the relief for Vi, a government official said, “The telecom sector is highly concentrated and the Government would, in the interest of consumers and competition, like to have multiple players in such critical sectors and therefore, survival of Vi as a viable player is critical for the telecom sector.”