Telcos Self-Assessed AGR Dues Creates Tension for Government

Bharti Airtel has created a reserve fund of Rs 34,260 crore and raised funds to meet the liabilities

Highlights
  • Bharti Airtel has to pay Rs 35,000 crore AGR dues
  • Tata Teleservices has just paid Rs 2,197 crore
  • Vodafone Idea has declared their self-assessed AGR dues

Telecom operators have been facing AGR dues burden since the supreme court has asked the operators to pay their AGR dues before March 17, 2020. However, to reduce the burden of massive AGR debt, telcos have been self-assessing their AGR dues. DoT noted that Tata Teleservices owes a whopping amount of Rs 14,000 crore to government towards their AGR dues and the telco have just paid Rs 2,197 crore, saying it has cleared its part. Similarly, Bharti Airtel self-assessed their AGR dues and mentioned that their AGR dues stand at Rs 13,000 crore and will not exceed Rs 18,000 crore. However, the government estimated Rs 35,000 crore. Vodafone Idea is the only telco which has not released their self-assessed AGR dues. As per the government estimates, the telecom operator has to pay Rs 53,000 crore.

Telecom Operators tries to Lower the Liabilities

Telecom operators have to pay massive AGR dues which will create enormous pressure on their financial credibility. Till now, Reliance Jio is the only telco which has paid their full AGR dues of Rs 195 crore. As per the words of analysts “the basis on which telcos are self-assessing their AGR dues is unknown. However, previous disputes and involvement of supreme court and government departments, the final call will be done by the supreme bench itself along with government officials decision. The views of the Supreme Court and government will finalise the AGR dues self-assessed by telecom operators”. This news is reported by Livemint.

Reduction in AGR Dues Will Relief Telecom Operators

If the government lowers the amount of liability towards AGR dues, telecom operators and investors will breathe peacefully. Especially, Vodafone Idea will try to get back in the industry at the telco giant have already noted that they will be forced to shut down if no relief is given by the government.

Bharti Airtel has already created a reserve Rs 34,260 crore and even raised funds to meet the liabilities. As per a scenario analysis, if Bharti Airtel pays their AGR dues of Rs 35,000 crore in full settlement, it will lower their cash levels and result in increased consolidated entity’s adjusted debt to Ebitda from 4.1 times to 4.4 times in the current fiscal year.

Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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Kiran Fernandes | GoadragonmonkAahokchetan-BengaluruLALIT Recent comment authors
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Aahok
Aahok

To save some money
Now VIL will pay 1o times of Agr
Greedy People

City
Bathinda
Operator
Jio
DTH
Tata sky
LALIT
LALIT

Nick Reed to meet the DOT team this week on VIL…seems Vodafone UK has been suddenly interested in India Business… they will survive … (personally I don’t want duopoly hence I want VIL to survive till 2022,, later they will for sure their 42% stake to China mobile)

chetan-Bengaluru
chetan-Bengaluru

I like vodafone as a brand. they are/were innovative but without PAISA they worth nothing in india. No capital infusion in network capacity, malpratices and taking its loyal customers granted is just irritating. If example, tomorrow Birla and Nick reed declare capital infusion and work towards recovery of the company, i will be first one to be their customer. Look, there is no way they can escape this AGR Payment. they will have to pay or perish…. This nick reed meeting is only window dressing. A loud thud before boom… Ravi shankar prasad is already irritated with nick. Infact the… Read more »

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