Such a transfer, if applied, would mark a watershed for the telecom enterprise in India and can go a good distance towards guaranteeing that the market doesn’t find yourself as a personal sector duopoly, analysts stated.
Individuals conversant in the matter advised ET that the transfer, if finalised, will supply monetary aid of over Rs 1 lakh crore for telcos, greater than half of which is able to accrue to distressed Vodafone Concept (Vi). The telco is gazing a reimbursement of 1000’s of crores of AGR dues to the federal government, beginning FY26, elevating questions on its viability.
Below the proposed aid, the AGR dues of Vi could come down by over Rs 52,000 crore; for financially strong Bharti Airtel, by practically Rs 38,000 crore; and for Tata Teleservices, by round Rs 14,000 crore, stated a second particular person. Reliance Jio doesn’t have any legacy AGR dues and isn’t affected by the proposed measure. Tata Tele now not affords retail mobility providers, solely enterprise mobility providers.
“The proposal is being mentioned on the highest degree together with the finance ministry, the telecom division and the cupboard secretariat,” stated one of many individuals conscious of the small print.
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The federal government is working to announce the measure—the second such substantial aid package deal for the debt-laden sector since September 2021—within the February 1 funds, stated the folks cited. This comes on the heels of final month’s aid measure—waiving the requirement for submitting financial institution ensures for previous spectrum dues, a transfer that benefitted Vi essentially the most. It can now not must submit ensures price Rs 24,800 crore, opening up area for lenders to increase debt to the provider.
The transfer to supply one other aid package deal underlines the federal government’s intent of guaranteeing a aggressive sector with three wholesome personal gamers, together with state-run Bharat Sanchar Nigam Ltd (BSNL).
The telecom trade, which had been reeling financially on account of cutthroat competitors because the entry of Reliance Jio in 2016, suffered a physique blow when the Supreme Court docket in October 2019 backed the federal government’s view and levied Rs 1.47 lakh crore of AGR dues. This comprised Rs 92,642 crore of license charges and spectrum utilization costs (SUC) of Rs 55,054 crore. Practically 75% of the dues consisted of curiosity, penalties and curiosity on penalties.
The final authorized transfer by telcos to problem the decision—or some elements of it—was exhausted when the highest court docket in September 2024 rejected a healing petition looking for a re-computation of the AGR dues. At the moment, VI’s AGR dues stood at Rs 70,300 crore whereas that of Airtel amounted to Rs 36,000 crore.
These dues have since elevated on account of fixed accrual of curiosity, penalties and curiosity on penalties. As per trade estimates, the most recent AGR dues until March 2025 for Vi could possibly be Rs 80,000-85,000 crore; Rs 42,000-44,000 crore for Bharti; and Rs 17,000- 19,000 crore for Tata Teleservices.
(Disclaimer: Suggestions, strategies, views and opinions given by the consultants are their very own. These don’t signify the views of the Financial Occasions)
