After Vodafone Idea, Bharti Airtel has accepted the Centre’s offer of a four-year moratorium on the payment of AGR (adjusted gross revenue) and spectrum dues.
Airtel is yet to decide whether it will convert the interest component of the dues into an equity stake held by the Centre in the company. A decision will be taken within the 90-day period stipulated by the department of telecom (DoT), sources said.
They said the company has communicated to the DoT that “it will take the four-year moratorium on AGR and spectrum dues with the option of prepaying as per NIA (notice inviting application) norms”. Airtel had time till October 29 to communicate with the government on the moratorium.
Bharti Airtel chairman Sunil Mittal had said the moratorium would help the telecom operator to conserve a cash outgo of Rs 35,000-40,000 crore over the next four years.
Last week, Vodafone had accepted the moratorium offer on spectrum dues. It is yet to convey its stand on AGR dues and the interest-swap.
The option of the dues moratorium was offered by the government to the operators as part of a recently announced relief package for the sector. Among the top three players, Reliance Jio is yet to announce its position on the government offer.
The moratorium, applicable from October 1, 2021, is an optional scheme and the company that decides to avail itself of the scheme will pay interest at the rate of the marginal cost of funds-based lending rate (MCLR) plus 2 per cent. MCLR is the minimum lending rate for banks.
A moratorium of up to four years in annual payments will protect the net present value (NPV) of the dues. The deferment is on payments of spectrum purchased in past auctions — excluding the auction of 2021 — for up to four years
Dues amendment
The government on Monday amended the telecom licence norms to reduce the tax burden on operators by exempting all non-telecom revenues, income from dividends, interest, property sale and rent, among others, for the calculation of levies such as licence fees and spectrum usage charges. The amendments will apply from this month and were part of the telecom reform package.
5G trial extension
Telecom operators have asked the DoT to extend the 5G trial period by six months. The current trial period ends in November.