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Vodafone Idea Likely to Survive if Government Allows to Pay AGR Dues Over 15 Years

Highlights
  • Vodafone Idea must pay Rs 5,200 crore in annual AGR pay
  • The authorities will face hassle as Vodafone Idea owes Rs 1.3 lakh crore
  • Government is planning to scale back license charges together with spectrum utilization cost

Vodafone Idea is going through huge monetary misery because the telco large has to pay Rs 58,254 crore in direction of AGR dues to the federal government. However, the Supreme Court may enable the deferred fee mechanism, which might enable the confused telco to clear their AGR dues in a interval of 15 or 20 years. However, as per the analysts, the telco large may lose its monetary credibility as they must pay roughly Rs 5,200 crore within the annual pay. Similarly, Bharti Airtel will even face misery because the self-assessed AGR dues of the telco large is roughly 3 times decrease than DoT.

Government Will Face Trouble if Vodafone Idea Exits

The analysts additionally marked that the federal government will face monetary misery if Vodafone Idea shuts down because the telco roughly owes a large debt of Rs 1.3 lakh crore. Even if Vodafone Idea survived the AGR disaster, the telecom operator must improve their Average ARPU by roughly 40%.

Not solely this, to instantly compete with Reliance Jio and Bharti Airtel, however Vodafone Idea will even have to speculate roughly $ 1.15 billion yearly to broaden their 4G community operations. Sanjay Kapoor, who’s the ex-CEO of Bharti Airtel marked that Bharti Airtel will clear AGR dues as its stability sheet permits it. However, Vodafone Idea will face hassle clearing off their AGR dues as the quantity if 3 times greater than Bharti Airtel.

Telcos Appeal Government for Relief Measures

Vodafone Idea appealed the federal government to offer reduction measures as it could assist the telco large to outlive the cash-crunch scenario. The authorities is planning to provide GST refunds of Rs 8,000 crore to telco large and settle it in direction of AGR dues. Not solely this, however the authorities can be planning to scale back the license charges together with spectrum utilization cost (SUC).

As after the Supreme Court verdict, Vodafone Idea has to pay Rs 58,254 crore in direction of AGR dues. Whereas, Bharti Airtel has to pay Rs 43,980 crore in direction of AGR dues. However, Vodafone Idea has simply cleared its self-assessed principal quantity of Rs 6,854 crore, and Bharti Airtel has cleared its self-assessed AGR quantity of Rs 18,004 crore.