The department of telecommunications (DoT) has dismissed the objections raised by Vodafone Idea in respect to licence fee demands amounting to Rs 3,273 crore (Rs 1,749 crore and Rs 1,524 crore respectively) for fiscal years 2016-17, thus dashing all hopes of the company of any reduction in its overall adjusted gross revenue (AGR) dues of Rs 58,254 crore. The telco’s own calculation has pegged the due amount at Rs 21,500 crore.
The company said in its regulatory filings to the exchanges that it is studying the communication from DoT to decide the next course of action.
The matter relates to the AGR verdict of the Supreme Court in 2019, wherein the apex court had directed incumbent telcos like Bharti Airtel, and Vodafone Idea to pay dues as per calculations of the DoT. An appeal by the telecom operators for recalculation of dues was rejected by the SC in July 2021.
As per the ruling, Vodafone Idea needs to pay AGR dues amounting to Rs 58,254 crore, of which it has paid Rs 7,854 crore. It needs to pay the balance in equal installments spread over a 10-year period.
Following the rejection, Vodafone Idea had filed a review petition in August 2021 seeking directions from the Supreme Court to carry out correction of these errors and the same continues to be pending.
In the review petition, the company had highlighted that even inadvertent errors and additions by DoT to the AGR dues have not been allowed to be corrected. “It is a travesty of justice that the petitioner is restrained from questioning arithmetical errors/omissions, which are going to cost the petitioner approximately Rs 25,000 crore,” the the company said in its review petition.
At the end of the April-June quarter, Vodafone Idea’s gross debt (excluding lease liabilities and including interest accrued but not due) rose to Rs 2.11 trillion. The gross debt comprises deferred spectrum payment obligations of Rs 1.34 trillion, AGR liabilities of Rs 66,860 crore that are due to the government, debt from banks and financial institutions of Rs 9,500 crore, and optionally convertible debentures amounting to Rs 1,660 crore.
Kotak Institutional Equities has estimated that the company would have an estimated Rs 5,100 crore cash shortfall in FY24 and would need to hike tariffs or raise funds to survive. By June 2024, the company has an obligation to pay off loans of Rs 6,826.6 crore.
Vodafone Idea has been trying to raise external funds for a long time but has not been successful. In the last three years, the promoters have pumped in Rs 5,000 crore with a commitment to put in another Rs 2,000 crore.