The Union Cabinet may consider a relief package for the telecom sector on Wednesday. Three sources with knowledge of the matter said that under the package for the region, spectrum payments to telecom companies may be put on hold for some time. Such a move will bring a lot of relief to telecom companies like Vodafone Idea, which have past statutory dues in thousands of crores of rupees.
Sources said that under the relief package being considered, telecom companies will get the option to convert interest on spectrum dues into government equity during the moratorium period of four years. Troubled Vodafone Idea Ltd. Its chairman Kumar Mangalam Birla had resigned from his post on August 4. After about six weeks, the relief package is being considered.
Government may give new definition of AGR
A source said that overall the reforms for the sector will be outlined under the relief package for the telecom sector. This may include a moratorium on arrears, redefining Adjusted Gross Revenue (AGR) and reduction in spectrum usage charges.
More than 50 thousand crore outstanding
Vodafone Idea Company came into existence by the merger of Vodafone India, the Indian arm of UK telecommunications company and Birla’s telecom company Idea Cellular Ltd. The company owes the government Rs 50,400 crore of various statutory works.
1.8 lakh crore debt on the company
Vodafone Idea is going through a bad phase at the moment. According to the data till 31 March 2021, the company has a debt of more than 1 lakh 80 thousand crores. In this, about Rs 96270 crores are of spectrum charges. Banks dues are close to 23 thousand crores and AGR dues are 58254 crores. The company has so far paid only 7854 crores in AGR dues. Still the company has to deposit more than 50 thousand crores.