Bharti Airtel, the second-largest telecom operator in India, has again sought for relief from the government over the adjusted gross revenue (AGR) dues. This comes right after the statement from the telecom minister Jyotiraditya Scindia in which he said that the government only helped Vodafone Idea (Vi) based on the orders from the supreme court (SC). Despite this statement, Airtel has again tried to get relief for the AGR dues.
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After the supreme court order, Vodafone Idea was granted a 10 year relief, or rather a repayment schedule. So for the next 10 years, Vodafone Idea will pay close to nothing towards pending AGR dues and spectrum dues, and then, from 2036 the normal payments will start as per scheduled. The telcos have been fighting the AGR issue for a long time now.
Airtel wants the same treatment as Vodafone Idea. However, the government isn't ready to give the same relief right away to Airtel as Vodafone Idea was only extended the relief after a supreme court (SC) order was passed on the matter. Airtel would likely keep fighting for the same relief. It is not that Airtel can't pay off the dues, but any relief would further boost the company's free cash flow (FCF) and allow it to make new investments and grow business rapidly.
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The telecom minister is clear about the government's stance. This will be an interesting situation to monitor. Airtel would likely approach the SC as well and demand for a fair treatment in the near future. Vodafone Idea needed help as the telco's debt was too much and the yearly payments towards them would have crippled the company's future and investments. That would have made the sector a true duopoly and that would not have been good for anyone.
