Vodafone Idea told the government, the telecom department and the Prime Minister’s Office that it will not be able to pay the Supreme Court-ordered £5.3 billion AGR (adjusted gross revenues) dues if it is not given an immediate bailout. The company, which has so far paid £350 million, has made it clear that its survival now hinges on a government support, which should come in various forms, including a staggered payment option, reduction in licence fee and spectrum charges that telecom companies need to pay.
“At this point of time, we do not have the financial strength to pay the balance, self-assessed principal, interest, penalty and interest on penalty. In the present financial situation, we would be in a position to do so only if the DoT and the government can kindly take up the steps we are requesting,” Vodafone Idea’s chief regulatory and corporate affairs officer, P Balaji said in a letter to the telecom secretary and PMO, which was also marked to the finance minister, cabinet secretary, among other high-ranking officials.
Vodafone has claimed that operations of Vodafone Idea, which has over 300 million subscribers in India, have been crippled due to “prolonged predatory pricing, and the recent AGR judgment”. “Vodafone Idea itself has been continually facing loses for the last several quarters.” The company also said that after mutual discussions, the amount payable under the SC judgment may be frozen to avoid recurring claim of interest, penalty and interest on penalty.
The company also requested that the government reduce the license fee on telecom players from 8% to 3%. Also, it said that the spectrum usage charge (SUC), which was fixed at 3% in 2016, be brought down to “zero or a uniform rate of 1%” for all spectrum. Vodafone Idea also said the government should fix a floor price for data tariffs, which will help boost the revenues of telecom companies and reduce stress.
No decision on relief for telcos
A relief for beleaguered telecom companies is still some time away. A key meeting of the multi-ministry Digital Communications Commission (DCC) failed to arrive at a solution to help the distressed operators such as Vodafone Idea and Airtel. Top officials said “more details are required for reconciliation of data on statutory dues”, and for this further meetings will be called.
In a day of hectic parleys at DoT, Vodafone Idea CEO and MD Ravinder Takkar also met telecom secretary Anshu Prakash but refused to give details of discussions. Telecom companies have been waiting for a bailout package from the government after the Supreme Court order put their liabilities on the AGR matter at £14.7 billion.
