Vodafone Idea and Airtel Dues Estimate Differ from DoT Because of These Reasons

The estimates charted out by DoT and the telecom companies differ a lot, and the analysts have found out why that is the case

Highlights
  • Vodafone Idea has paid Rs 3,500 crore towards the dues
  • Bharti Airtel has paid Rs 18,004 crore towards the dues to the DoT
  • Vodafone Idea is looking to pay Rs 3,500 crore more

Bharti Airtel and Vodafone Idea have faced a lot of obstacles in the past few months. Of course, some of them have come from the competition reigning in the industry, but mostly the cause of struggle for the two of the private telecom operators has been because of the AGR dues. As per the latest report from ET Telecom, the analysts have found the reason why the estimates charted out by the telecom companies, and the Department of Telecommunications (DoT) differ from each other. While Bharti Airtel and Vodafone Idea, pegged the dues to be paid at significantly lower, the DoT estimates were through the roof. According to the analysts, the stark contrast between the two estimates comes because of the IUC cost calculation and also duplication.

vodafone-idea-airtel-estimates-dot

Reasons for Contrasting Estimates for AGR Dues

As per the DoT, the total dues which are to be paid by Vodafone Idea have been estimated to be Rs 53,000 crore, whereas, for Bharti Airtel, these dues have been estimated to be Rs 37,700 crore counting the dues to be paid by Telenor as well. As opposed to this, the Bharti Airtel’s estimate of the dues to be paid stands at Rs 13,004 crore and that of Vodafone Idea stands at Rs 21,533 crore.

According to the analysts, the two telecom companies, Vodafone Idea and Bharti Airtel were compelled to take a conservative stance, and this happened because the two companies did not get ample time to calculate their dues payable.

Kotak Institutional Equities remarked about this, “path forward could involve an independent audit by the CAG (Comptroller and Auditor General) and/or one of the Big 4 auditing firms, assuming the Supreme Court sees the telcos’ efforts (part/ad-hoc payments) as bona fide and allows an (AGR) dues reconciliation exercise.”

Bharti Airtel Pays All of AGR Dues

As per ICICI Securities, any accrual deduction was disallowed by the DoT for working out AGR thus increasing the amount. Other factors which led to the higher figures by the DoT was the unavailability of the proper IUC payout documentation. Some revenue lines might also have found duplication in the estimates, thereby causing this difference in the two estimates.

Until now, Bharti Airtel has paid Rs 18,004 crore towards the pending dues adding Rs 5,000 crore on top as ad-hoc payment. Whereas, Vodafone Idea has paid around Rs 3,500 crore and is on the lookout to arrange another Rs 3,500 crore to pay to the DoT.

Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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