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Vodafone Idea looks for relief from telecom panel meet on Friday

Vodafone Idea has asked the government to help set a floor price for mobile services and lower licence fee and spectrum usage charges for auctions (Photo: Reuters)Premium
Vodafone Idea has asked the government to help set a floor price for mobile services and lower licence fee and spectrum usage charges for auctions (Photo: Reuters)

  • Telco seeks adjustment of 8,000 crore of GST refund towards AGR, payment of penalty, interests and interests on penalty in a staggered period
  • For relief on dues, the company has also sought a moratorium of three years followed by payment tenure of 15 years at a simple interest of 6%, said a source

NEW DELHI: Vodafone Idea Ltd has asked the government to help set a floor price for mobile services and lower licence fee and spectrum usage charges for auctions to alleviate stress in the industry, a person aware of the matter said.

The company’s request comes two days before the Digital Communications Commission, the highest decision- making authority in the telecom department, meets to discuss relief measures for telecom companies hit by the Supreme Court verdict on telecom dues.

Telecom operators have been left scrambling to pay dues after the Supreme Court on 14 February pulled them up for failing to comply with its October verdict. Vodafone Idea is the worst hit by the verdict, with the top court directing it to pay an estimated 50,000 crore in past dues. It has so far paid 3,500 crore to the government.

“Vodafone Idea has sought that the licence fee be reduced from 8% to 3% and spectrum usage charges be reduced from 3% to 1% for future auctions. The company has also sought that GST refunds due to the company worth 8,000 crore be adjusted against its dues and that payment of interest, penalty and interest on penalty be done in a staggered manner," the person said.

“For relief on dues, the company has also sought a moratorium of three years followed by payment tenure of 15 years at a simple interest of 6%," the person said.

To be sure, tariffs are within the ambit of the Telecom Regulatory Authority of India, which has floated a consultation paper on whether there is a need for a floor price.

Emails sent to Vodafone Idea and the department of telecommunications (DoT) remained unanswered.

The Digital Communications Commission, which has representatives from DoT, ministry of finance, ministry of electronics and information technology and NITI Aayog, will meet following a series of meetings between Vodafone Idea chairman Kumar Mangalam Birla and top government officials. Birla met telecom secretary Anshu Prakash on 18 February and followed it up by meeting finance minister Nirmala Sitharaman the next day.

After last week’s meetings, the finance ministry and DoT have started discussions on possible relief measures to prevent the telecom sector from becoming a duopoly.

Several proposals are being discussed such as setting up a fund, which will lend money to telcos at a concessional rate to repay their dues, and also an option of a revised payment plan that will enable companies to defer payment of penalties and interests, Mint had reported on Tuesday.

Meanwhile, DoT on Wednesday asked all operators to speed up their self-assessment of adjusted gross revenue (AGR)-related dues and submit documents backing their calculation even after Bharti Airtel, Tata Teleservices and Vodafone Idea made partial payments last week.

“The government is also mulling a proposal whether it can issue soft loans to Vodafone Idea from the universal services obligations fund which has a corpus of over 50,000 crore for the company to meet AGR payments," a second person aware of the matter said.

To be sure, any relief measures will require the approval of the Union cabinet.

The court had last year upheld the government’s definition of AGR, on which it calculates levies on telecom operators. The order dealt a blow to the telecom industry, which argued that AGR should only include revenue from core telecom operations. Telecom operators now have to pay dues for the past 14 years, along with interest and fines.

Bharti Airtel last week paid 10,000 crore out of its estimated liability of more than 35,000 crore. It plans to pay the remainder before 17 March after doing a self-assessment of the dues. Tata Teleservices paid 2,197 crore last week, but the government pegs its dues at 14,000 crore. Jio is the only telco which paid its entire 190 crore dues on 23 January.

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