Airtel and Vodafone Idea may get Rs 23000 crore from DoT
Airtel and Vodafone Idea Might Get Rs 23000 Crore from DoT. If the cabinet note is favored, it will be a big help to the struggling Vodafone Idea (Vi). Vi also expects to raise another Rs 14,500 crore from promoters and outside investors. If things turn positive for the telco from both sides, it will help a lot in the upcoming 5G spectrum auction.
Private telecom operators Bharti Airtel and Vodafone Idea (VI) in India may get a total of up to Rs 23,000 crore from the Department of Telecommunications (DoT). Both the telcos will have to pay thousands of crores in Adjusted Gross Revenue (AGR) dues to DoT. To ensure the security of payment of AGR dues, telecom companies will have to submit a Bank Guarantee (BG) to the DoT.
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But since DoT has offered telcos a moratorium of four years on payment of AGR dues, there is no need to retain BGs as they are currently idle.
According to a report by ET Telecom, the Department of Telecommunications is working on a cabinet note that will propose to refund BGs worth Rs 23,000 crore to Vodafone Idea and Bharti Airtel. Of this, Vodafone Idea is expected to get Rs 15,000 crore and Bharti Airtel Rs 7,000 to 8,000 crore.
Vodafone Idea Had Already Asked DoT to Return BGs
Cash-strapped Vodafone Idea (Vi) had already asked DoT to refund Rs 15,000 crore BG against AGR dues. VI had said that since AGR dues are not in the purview of payment, why should DoT keep BG.
If the cabinet note is favored, it will be a big help to the struggling Vodafone Idea (Vi). Vi also expects to raise another Rs 14,500 crore from promoters and outside investors. If things turn positive for the telco from both sides, it will help a lot in the upcoming 5G spectrum auction.
Vi has been criticized for not being able to scale up investment in 4G networks and matching the Capex levels maintained by Airtel and Jio.
If the telco gets all this money, it will be able to help itself to some extent in this regard. Though the decision on the cabinet note will take some time, it should come before the spectrum auction starts.
Airtel and Vodafone Idea Might Get Rs 23000 Crore from DoT
