Vodafone Idea and Bharti Airtel In Search of Financial Strategy to Pay Up Dues Worth Rs 80,000 Crore

Last week in the telecom industry was not particularly good for the telecom companies as the Supreme Court passed a judgement that did not fall in favour of the telcos. This new Supreme Court order was about the definition of Adjusted Gross Revenue (AGR) which has been a pending matter in the legal domain for a long time. The Supreme Court order, finally dictated that the definition of AGR would encompass not only the core services of telecom companies but would also include the non-core services as well. While the telecom operators had been against this stance ever since the battle was being fought in the Supreme Court. The telecom companies had stated that AGR should include only the revenue from core services which they provided. The reason being that AGR is the basis on which Spectrum Usage Charges (SUC) and License Fees is calculated, which is to be paid to the government by these companies.

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Telcos Get Three Months to Pay Up Dues

Since the order came last week and the telecom operators do not have long, more specifically three months, to pay up the dues which have come up following the new order, both Bharti Airtel and Vodafone Idea spent their Diwali weekend trying to come up with a financial and legal plan, as per an ET report. The dues which have come up after this decision can be upwards of Rs 1.3 lakh crore for the combined telecom operators. Also, the top executives of both of these telcos are to meet the government officials on the issue to come up with strategies for the payment. The government is also likely to jump in on the bandwagon to provide some kind of relief to these telecom operators. As per the officials, they are going through the fine print of the judgement to come up with a financial plan to raise money so that they can stay afloat.