Vodafone Idea (Vi), India’s third-largest telecom operator, has asked the Department of Telecommunications (DoT) for releasing up to Rs 15,000 crore (approximately $2 billion) in bank guarantees (BGs) kept against the payment of adjusted gross revenue (AGR) dues. Since the AGR dues have been deferred for the next four years, the need of maintaining bank guarantees right now is unnecessary, believes Vodafone Idea.
According to an ET Telecom report, Vi has also asked the government to freeze October 24, 2019, as the date for freezing AGR dues. This is the same date of the Supreme Court judgement on the AGR dues case.
Vodafone Idea Already Giving Govt Equity
Vodafone Idea has provided the government with the security of converting dues into equity. The telco has thus asked DoT that it releases the BGs worth Rs 15,000 crore as it services no purpose right now.
Vodafone Idea has communicated with the DoT that its potential investors are looking for these problems to be resolved before they can make up their minds to invest in the company. Vi would benefit a lot if the government decides to release Rs 15,000 crore of BGs kept against the AGR dues. It would give the telco more freedom during the 5G spectrum auctions, enable a higher capex level, and might also get some new investors interested.
Vodafone Idea’s (Vi) AGR dues were assessed to be Rs 58,254 crore by the DoT, and the telco has already paid Rs 7,854 crore out of the said amount. The telcos, including Vodafone Idea (Vi), don’t need to pay the AGR dues right now because of the relief measures announced by the Indian government.
The government said that the telcos could opt for a deferment in the payment of AGR as well as spectrum dues for the next four years.
Vodafone Group Plc, the largest promoter of Vi, is also trying to infuse fresh capital in the telco by selling stake from Indus Towers.
