The much-awaited news for Vodafone Idea Limited seems to be finally here. Reports on the web say that the Cabinet has approved relief package for the stressed telecom sector. While the complete details of revival package are yet to come out, this is a piece of really good news for Vodafone Idea as the telco has been under financial crisis for a while. Vodafone Idea has been eagerly waiting for two the government to implement two things- one is relief package for AGR dues and the other one is floor pricing. For the unaware, Vodafone Idea is currently supposed to pay a whopping Rs 53,000 crore as AGR dues out of which the telco has managed to clear just Rs 3,500 crore so far. The Supreme Court is expected to go hard at telcos during its next hearing on March 17, but before that, we can expect the relief package to come out.
Cabinet Reportedly Approved Relief Package for Telecom Sector
As reported by ET Telecom, the Cabinet has approved a relief package for the debt-laden Indian telecom sector. Telcos have to pay Rs 1.47 lakh crore dues towards Adjusted Gross Revenues. The DoT has so far received just over Rs 23,000 crore AGR dues with Vodafone Idea being the least payer. Vodafone Idea officials, including Vodafone CEO, met the government and telecom minister seeking relief and those meetings seem to have worked out.
As of this writing, details regarding the relief package are not available. The report added that the relief package might include clearance of AGR dues in several years. Earlier, Vodafone Idea sought 15 years for clearing the Rs 53,000 crore AGR dues.
Vodafone Idea has been battling with DoT saying that the AGR dues levied by the department are way higher than the dues calculated by the telco internally. Vodafone Idea says it will have to pay Rs 21,500 crore as AGR dues. Not only Vodafone Idea, other telcos including Bharti Airtel and Tata Teleservices also said the AGR dues calculated by DoT are on the higher side.
Bharti Airtel has managed to clear Rs 18,000 crore out of the Rs 37,000 dues set by the Department of Telecommunications (DoT). The Supreme Court last month directed all the telcos to clear AGR dues immediately without any delay, but Vodafone Idea has so far paid only Rs 3,500 crore. As noted, the next Supreme Court hearing is on March 17 and everyone is awaited for the decision including telecom operators.