Vodafone Idea has written to the telecom department (DoT) expressing its inability to pay full AGR dues with the support of the government measures.
Vodafone Idea needs to pay over Rs 53,000 crore towards AGR dues and paid 7 percent of its liabilities so far. Vodafone Idea earlier indicated that it would shut down business in the case of lack of support from the government.
Vodafone Idea said the company would be in a position to meet its liabilities only if India government initiates steps including allowing set offs for GST credit accumulated so far, and permitting staggered mechanism for payment of balance amount of interest, penalty, and interest on penalty.
It said adjustment of GST credit due from the government could help in meeting its AGR payment.
The company has subscriber base of 300 million, and employee base of 10,000.
Vodafone Idea can settle the balance of its self-assessed principle if the Centre allows set-offs of Rs 8,000 crore worth of GST credit lying with the government. The amount when set off will even pay in part the self-assessed interest, PTI reported.
Vodafone Idea has sought a moratorium of three years on payment of interest and penalty, and subsequent payment timeline of 15 years at an interest of six per cent. Vodafone Idea is also seeking grant of loan, equal to AGR amount at six percent interest rate.
Vodafone Idea also demanded reduction in licence fee to three percent from the current eight percent, and also sought reduction in spectrum usage charges (SUC) to zero or a uniform rate of one percent for all spectrum.
Vodafone Idea said a floor price needs to be immediately made effective, say from April 1, 2020 to ensure that the sector is fully sustainable and in a position to pay deferred spectrum and AGR dues and still invest to create world-class network and services.
The company said the introduction of floor price will enable revenue of the telecom sector to nearly double from the current level of Rs 1.75 lakh crore.
The Cellular Operators’ Association of India (COAI) has sought attention from government on issues including a hike in the floor pricing of tariff, and a reduction in GST and licence fees. COAI wrote a letter to Anshu Prakash, secretary of DoT, and chairman of Digital Communications Committee (DCC).
Meanwhile, Moody’s Investors Service on Wednesday said Bharti Airtel has the financial capacity to withstand a payout of $5 billion in statutory dues.
Bharti Airtel posted Rs 35,300 crore ($5 billion) liability for past-due AGR fees associated with this litigation, but is still completing its self-assessment to determine the final amount, Moody’s said.
Rs 35,300 crore cash payment will not cause a significant deterioration in the credit quality of Bharti Airtel while in the alternate scenario of a smaller cash payment of Rs 25,200 crore reflecting the principal and interest amount, would position the company more comfortably within its current rating, Moody’s said.