Vodafone Idea (Vi), the third-largest telecom operator in India, is likely to get approval from the telecom department for the payment of the pending license fees (LF) and spectrum usage charges (SUC) for the third quarter. It was reported that the telco had paid just around 10% of its statutory dues that arose from the third quarter. According to an ET report, the telco has proposed a payment plan to the Department of Telecommunications (DoT), which is set to be approved.
The report said that the government had asked the company for a tentative date for making the payment. Thus, the telco has come up with a payment plan that also includes the payment of interest on the dues. A DoT official told the publication that the plan that Vi has proposed can be allowed because the penalty is no longer there for replayed payments. Thus the telco can make the delayed payment with interest in a phased manner.
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The DoT official also said that the telco can raise funds as the conversion of dues into equity has happened for the government. It is worth noting that the government now owns a 32% stake in the telco, and the aim would be to revive its business as fast as possible. At the end of Q3 FY23, Vi's net debt stood at Rs 2.28 lakh crore with a cash balance of Rs 160 crore only.
All the telecom companies in India have to pay 8% of their adjusted gross revenue (AGR) as LF and 3-4% as spectrum usage charges (SUC). The SUC for the telcos has been dropping as the spectrum bought during the 5G auctions doesn't attract any SUC. The government won't charge SUC on the new spectrum that the telcos purchase. This is to help the cash-stressed telecom sector in India.