Telecom woes: Vodafone Idea to approach Centre for relief

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Published: October 26, 2019 2:14 AM

The companies will now be required to include the non-core income for calculation of AGR, which would require them to pay the government as much as Rs 92,641 crore extra, including disputed demand, interest and penalty.

Vodafone Idea may have no cash left for capex in case of full payment to the government following an order by the SC on AGR, brokerages said.

Vodafone Idea on Friday said it was reviewing the financial implications of the recent judgment of the Supreme Court on the issue of adjusted gross revenue (AGR). “The judgment has financial implications, which we are reviewing. We will engage with the Department of Telecom (DoT) in order for it to consider granting relief, including a waiver of interest and penalties,” the company said in an exchange filing.

On Thursday, the SC upheld the DoT’s definition of AGR — a long-standing dispute between the government and the telcos. The companies will now be required to include the non-core income for calculation of AGR, which would require them to pay the government as much as Rs 92,641 crore extra, including disputed demand, interest and penalty.

Following the judgment, Vodafone Idea shares fell 23.36%, closing at Rs 4.33 on Thursday. On Friday, the company’s shares fell further and were down 5.08%, closing at Rs 4.11 on the BSE.

According to DoT’s calculations, the telco owes a total of Rs 28,309 crore to the government, including Rs 13,006 crore in interest on balance of license fee, a penalty of Rs 3,206 crore and an interest on penalty of Rs 5,226 crore.

Vodafone Idea may have no cash left for capex in case of full payment to the government following an order by the SC on AGR, brokerages said.

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