The federal government has placed on maintain the Division of Telecommunications’ (DoT) proposal to waive adjusted gross income (AGR) dues for telecom operators, citing an absence of consensus on the highest ranges. This choice offers a setback to Vodafone Thought (Vi), which is struggling underneath a heavy debt burden, in line with an ET Telecom report.
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Reduction Proposal Breakdown
The proposal sought to waive 50 p.c of curiosity together with penalties and curiosity on penalties, providing over Rs 1 lakh crore in reduction to telcos. Vi, the largest beneficiary, stood to realize greater than half of this quantity, whereas Bharti Airtel and Tata Teleservices would have acquired reduction of Rs 38,000 crore and Rs 14,000 crore, respectively. Reliance Jio remained unaffected because it has no legacy AGR dues.
“The broader view in authorities circles is that it will be improper to supply monetary reduction to personal firms, a few of that are profit-making, on a problem that has been settled and determined by the Supreme Court docket,” the report quoted an individual conscious of the main points as saying.
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Main Setback for Vodafone Thought
The particular person reportedly added that the DoT will work on a revised reduction plan for the debt-laden sector, given the precarious scenario of Vodafone Thought.
“The choice of taking further fairness in Vodafone Thought or every other reduction measure is more likely to be thought-about,” stated the particular person, in line with the report. “In precept, the federal government agrees that reduction must be given however the present AGR waiver proposal was not proper.”
Vi — with a money place of Rs 12,090 crore on December 31 — is scheduled to pay Rs 29,100 crore as statutory dues in March 2026 and Rs 43,000 crore from FY27, until FY31, as per analysts at JM Monetary, the report stated.
The corporate (Vi) has requested reduction on curiosity and penalties and is open to a different spherical of debt-to-equity conversion.
The telecom sector has struggled financially for the reason that Supreme Court docket’s 2019 ruling that upheld AGR dues of Rs 1.47 lakh crore, with almost 75 p.c comprising curiosity and penalties. A four-year moratorium on funds, granted in 2021, ends in 2025 for spectrum dues and in 2026 for AGR dues.
Additionally Learn: Vodafone Thought Fails to Present Rs 6,090 Crore Financial institution Assure to DoT: Report
Authorities’s Stake in Vi
“The federal government has already transformed Vi’s curiosity price Rs 16,000 crore right into a 33 p.c stake. After a latest fairness fundraise of Rs 24,000 crore and capital infusion by the Vodafone Group, the federal government stake stands at 22.56 p.c, with Vodafone Group Plc holding 24.39 p.c and the Aditya Birla Group (ABG) simply over 14 p.c. The federal government might take further stakes within the firm if different measures fail to take form, the particular person cited within the report stated.
Vi has acknowledged that it goals to handle any potential money shortfall in its AGR funds by one other spherical of debt-to-equity conversion by the federal government. The corporate has additionally reached out to the federal government, requesting reduction on the curiosity and penalty parts of AGR.
