Companies

Voda Idea board opts for four-year moratorium on spectrum payments

Our Bureau Mumbai | Updated on October 20, 2021

Other telcos have not yet responded to the DoT’s notice   -  V_V_Krishnan

Move after DoT bid to provide relief to cash-strapped telcos

The board of directors of Vodafone Idea has decided to exercise the moratorium offered by the government on payments related to spectrum dues.

Moratorium period

The moratorium is for 4 years (October 2021 to September 2025). This is in accordance with the Department of Telecommunication’s October 14 notification to provide relief by allowing cash-strapped telcos the option to defer their payments for spectrum acquired in the previous rounds of auction. Operators were originally supposed to pay the dues in annual installments over 10 years.

In a stock exchange filing, Vodafone Idea also noted that other reliefs that are being provided by the DoT will also be considered by the company board within the stipulated timeframe.

The DoT had given three telcos time until October 29 to decide on opting for the 4-year payment moratorium on spectrum payments and AGR dues. Therefore, Vodafone Idea has time until October 29 to confirm whether they will be opting for the AGR moratorium as well. Other telcos have not yet responded to the DoT’s notice.

The DoT announced the relief package in September, which provided cash-strapped telcos with a myriad of relief options, including the option to convert debt to the government into equity, as well as reduced bank guarantees. The DoT is also giving telcos 90 days to exercise the option of converting the interest which accrues due to deferred payments into government equity.

Vodafone Idea CEO Ravinder Thakker had previously said that the government’s bailout measures have been a major lease of life for the ailing telco. Where the company can now redirect its revenues to invest back into its business. Vodafone Idea has been sitting on a dues Rs 1.9 lakh crore as of June out of which it owes 1.6 lakh crore to the government.

Published on October 20, 2021

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