Bharti Airtel has opted for the four-year moratorium on Rs 3,000-crore adjusted gross revenue (AGR) dues for FY18 and FY19, sources said. However, the telecom company would not go for converting the accrued interest on this amount into government equity.
These dues were not covered by the Supreme Court’s October 2019 order under which the telecom operators had to pay the dues, but the department of telecommunications recently gave the operators option to bring latter period dues also under the moratorium offered by it in September 2021 package.
Last year, in October, Bharti Airtel had opted for the four-year moratorium option for payment of its AGR and spectrum dues till FY17. Around that time, in an interview with FE, Bharti Airtel chairman Sunil Bharti Mittal had said that the company would get a cash flow relief of about Rs 35,000-40,000 crore by opting for the four-year AGR and spectrum payment moratorium. He had said that this amount would be invested back into the network for 5G, etc.
“We will earn a cash flow of about Rs 35,000-40,000 crore. As a result, a lot of public market debt can be reduced. We will be able to invest the savings in cash flow into the industry and invest in technology. I can assure you the savings on the cash flow will not go into the dividend,” Mittal had said.
On June 23, Vodafone Idea had decided to defer an additional AGR dues of Rs 8,837 crore by a similar period and avail the government’s four-year moratorium on such payments.
The moratorium does not apply to Reliance Jio as it does not have any pending AGR dues for the period.The AGR dues had emanated as part of payment of licence fee and spectrum usage charge.The telcos had deducted certain revenues to compute the AGR because they felt they were not part of telecom services. However, their contention was challenged by the DoT, which won the case in the Supreme Court.
In December 2021, Bharti had prepaid Rs 15,519 crore to the DoT, clearing all dues relating to spectrum brought in 2014 auctions. In March this year, it prepaid Rs 8,815 crore, clearing a large portion of dues relating to spectrum bought in the 2015 auction.