Indian Telcos Might Get Some Relief With AGR Dues

The Indian government is working on a relief package for the telecom sector. One of the many ways the telcos can be helped is by reducing the load of AGR dues. The telcos will have to pay thousands of crores less in a single year if the number of instalments is increased from 10 to 20.

Highlights

  • Indian Telecom operators might get some relief in regards to adjusted gross revenue (AGR) dues
  • It is worth noting that the cabinet had earlier proposed the telcos to pay the AGR dues in 20 years
  • The Indian government is working on a relief package for the telecom sector

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Indian Telcos

Indian Telecom operators might get some relief in regards to adjusted gross revenue (AGR) dues. The telcos, including Airtel and Vodafone Idea, were asked by the Supreme Court (SC) to clear the dues in 10 instalments over a decade. Since the AGR dues amount is not being rectified, it has put a lot of pressure on the telcos as the total dues amount in thousands of crores. But as per an ET Telecom report, the government might ease the pressure on the telcos by allowing them to pay the same amount over 20 years in 20 instalments instead of 10. This would reduce the money they have to pay to the government in relation to the AGR dues by up to 50%.

Government Has the Power to Help Telcos

The Indian government is working on a relief package for the telecom sector. One of the many ways the telcos can be helped is by reducing the load of AGR dues. The telcos will have to pay thousands of crores less in a single year if the number of instalments is increased from 10 to 20.

It is worth noting that the cabinet had earlier proposed the telcos to pay the AGR dues in 20 years. But a SC ruling changed that to 10 years. The government doesn’t usually overrule what the SC has said, but as per Vodafone Idea (Vi) CEO Ravinder Takkar, it has the power to.

However, Takkar said that it would be helpful if the SC and the government are both aligned in their vision to help the telcos. Vodafone Idea would be very happy to see the AGR dues pressure dropping since it will be able to utilise all that extra cash to invest in its networks and 5G technology which is expected to be the cash cow for the operators in the next 3 years. Note that none of this is confirmed, and all of it is just speculation until and unless a firm announcement from the government comes.

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