As part of the reforms announced for the telecom sector, the government has written to companies including Airtel, Vodafone Idea and Reliance Jio, asking them to tell whether they will opt for the moratorium for four years or not.
Vodafone Idea has informed the government that it has approved a four-year moratorium on spectrum payments. The company has also said that other options for the relief package will be considered by the Board of Directors within a stipulated time frame and informed to the department. Explain that the government had asked telecom companies to decide on the moratorium option given to them by October 29.
As part of the reforms announced for the telecom sector, the government has written to companies including Airtel, Vodafone Idea, and Reliance Jio, asking them to tell whether they will opt for the moratorium for four years or not. Along with this, the government had also given 90 days to the companies to opt for converting the interest related to the moratorium period into equity.
Vodafone Idea board clears moratorium
In a letter to the DoT, the company said it would confirm the decision at a later date on whether it would opt for the moratorium on Adjusted Gross Revenue (AGR) payments. Not only this, but the company also said that it will inform later whether it chooses to convert the interest into equity on the deferred payment or not. The company has time till October 29 to opt for the AGR moratorium. Let us tell you that Bharti Airtel chairman Sunil Mittal had said last month that the company will opt for the moratorium and use the cash available for network expansion.
The government had asked telcos to inform it by 29 October whether they wanted to opt for the four-year moratorium. It also gave 90 days to the operators to indicate if they want to opt for converting interest amount pertaining to the moratorium period into equity, PTI reported on 18 October. Along with this option, the audited financial statements of the immediately preceding fiscal (2020-21) may be submitted, reported PTI.
Last month, in a major relief to the telecom industry, the government announced a wide set of reform measures by granting a moratorium on unpaid dues, redefining adjusted gross revenue prospectively, and cutting spectrum usage charges.
Rival Bharti Airtel Ltd’s chairman Sunil Mittal said last month that his company will opt for the payment moratorium offered. Following the reform package announced by the government, UK’s Vodafone Group Plc and Aditya Birla Group have drawn up fresh plans to invest in the telco, Mint reported earlier this month. The two promoters are likely to invest as much as $400 million in fresh equity in Vodafone Idea to strengthen the struggling telecom operator. Both promoters will invest around $200 million each to retain their stakes at the current level once Vodafone Idea raises funds from external investors.