Vodafone Idea opts for four-year moratorium to clear AGR dues

Vodafone Idea (PC-Shutterstock)

Vodafone Idea on October 20 announced that its board has opted for the four-year moratorium to clear Adjusted Gross Revenue (AGR) dues. Vodafone Idea will clear the dues, spectrum payment over a four-year period starting October 2021 and ending September 2025.

The debt-laden telco said in a stock exchange filing: “We wish to inform you that the Board of Directors of the Company has approved the exercise of the option of deferment of the Company’s spectrum auction installments for a period of 4 years (October 2021 to September 2025).”

With this announcement, Vodafone Idea became the first telecom to accept the Department of Telecommunications (DoT)’s four-year moratorium on AGR dues, which is part of the recently launched telecom relief package.

Under the telecom relief package, which the Centre approved on September 15, Bharti Airtel and Vodafone Idea were given a four-year moratorium on AGR, spectrum dues along with a reduction in bank guarantees, option to convert operators’ principle statutory dues (owing to deferred payment) into equity at the end of the moratorium period/ after four years.

The telcos have been given time until October 29 to decide and declare if they want to opt for the four-year moratorium on payment dues.

The measures, aimed at providing relief to companies such as Vodafone Idea that have to pay thousands of crores in unprovisioned past statutory dues, also include the scrapping of Spectrum Usage Charge (SUC) for airwaves acquired in future spectrum auctions.

For the past dues, the government has allowed a moratorium or deferment of up to four years in annual payments. But the telecom companies will have to pay interest during the moratorium period.