Vodafone Idea Could Get Further Relief from PMO: Report

Vodafone Idea Limited (VIL), the third-largest telecom operator, might just get relief from the central government yet again. The Department of Telecommunications (DoT) has reached out to the Prime Minister’s Office (PMO) for considering further help for Vodafone Idea Limited, said a report from Mint.

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The telecom operator owes the government about Rs 83,000 crore in deferred adjusted gross revenue (AGR) dues. The annual payments would come around Rs 18,000 crore once the AGR dues are payable. The company has a total of 198 million customers now. At the company’s current cash generation rate, it will be hard for it to pay the dues off. The network investments are funded through the money Vi raised from outside the company.

The fundraising has hit a pause as of now because banks aren’t too keen on exposing themselves further to Vi. Vodafone Idea has asked for more help from the government. The Supreme Court decided that it wouldn’t change the dues amount and neither would it ask the government to do anything else. The PMO can only help Vi now.

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The DoT letter sent to PMO mentions multiple relief options. One of the options is to defer the dues by another two years. This will give Vi more headroom to grow its business by investing the money into the networks and keep paying off small amounts of dues in the period. Without the government support, India’s telecom industry will become a duopoly.