Majority of Vodafone Concept’s AGR dues could possibly be cancelled: UBS report

Given the Authorities’s acknowledged goal of guaranteeing three viable personal telecom operators, as a lot as 50-75 per cent of AGR dues of Vodafone Concept might get cancelled, in line with a brand new report by UBS

“Wanting on the particulars of healing petition filed by telcos on the AGR case, we imagine as a lot as 50-75% of AGR dues might probably be cancelled for VIL,” the brokerage agency mentioned.

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“The Authorities has, on a number of events, acknowledged a want to maintain three viable personal cellular gamers in India. Whereas the announcement in Q3 FY21 permitting telecom operators to defer spectrum and AGR associated funds was in our view a step in the proper course, we imagine extra measures particularly on AGR funds could possibly be taken because the moratorium involves an finish. We have a look at numerous situations across the telcos’ dues to the Authorities, and imagine as a lot as 50-75 per cent of the AGR dues might probably be waived or transformed into fairness,” it added.

In October 2023, the Supreme Courtroom accepted the healing petition from Bharti Airtel and VIL which focuses on two key factors: The telcos declare that the penalty and curiosity prices needs to be waived since earlier selections within the TDSAT panel had been in favour of the telcos earlier than the ultimate hostile Supreme Courtroom judgment and therefore the telcos aren’t responsible for penalty; and secondly, Each operators declare arithmetic errors in DoT’s calculations of license charges.

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The unique demand beneath the AGR case was ₹63,000 crore for Bharti Airtel (together with liabilities on acquired spectrum from Tata, Telenor and many others) and for VIL was ₹58,000 crore.

Out of those, Airtel has paid ₹18,000 crore whereas VIL has paid ₹8000 crore. “Additional extra, primarily based on our understanding with operators, roughly 75 per cent of the full AGR due was attributable to penalty and curiosity on penalty and if we had been to imagine the calculation errors advised by telcos are accepted, the liabilities might cut back additional by ₹35000-36000 crore for VIL (50 per cent of the excellent in its books) and ₹20000 crore for Airtel (assuming an identical proportion of its excellent legal responsibility). Certainly, if the Supreme Courtroom agrees to each the requests of the telcos, the ultimate legal responsibility for Airtel would turn out to be nearly negligible, whereas VIL’s remaining legal responsibility would additionally decline by 40-50 per cent,” UBS mentioned.