telecom | IST

Cabinet approves relief package for telecom sector, announces moratorium of 4 years on AGR dues

The cabinet on Wednesday approved a relief package for the telecom sector, while announcing a moratorium of 4 years on Adjusted Gross Revenue (AGR) dues, sources informed CNBC-TV18.

The cabinet on Wednesday approved a relief package for the telecom sector while announcing a moratorium of 4 years on Adjusted Gross Revenue (AGR) dues. CNBC-TV18 had earlier reported the same.
The deferred payments cycle will begin from Oct. 1, telecoms minister Ashwini Vaishnaw told a news conference, giving debt-ridden Vodafone Idea -- which previously said it runs the risk of a shutdown without government help -- more time to pay dues.
After the development, shares in wireless carriers Bharti Airtel rose 5.4 percent and Vodafone Idea was up 2.9 percent.
The so-called relief package will help India's three major wireless carriers including tycoon billionaire Mukesh Ambani's Reliance Jio but especially the embattled Vodafone Idea.
The telecoms sector was shaken by Jio's entry in late 2016 with free voice and cut-price data plans. Jio pushed several rivals out of the market, while others - such as the Indian unit of Britain's Vodafone and local Idea Cellular - were forced to regroup.
On August 4, Kumar Mangalam Birla resigned as chairman of beleaguered Vodafone Idea Ltd (VIL). VIL's August 4 intimation about the top-level changes had come on a day stock exchanges were seeking clarification from the company over the widely reported June 7 letter of Birla to the Cabinet Secretary offering his stake in Vodafone Idea to the government or any company approved by the government for free.
VIL, which was created from the merger of British telecom giant Vodafone's India unit and Birla's Idea Cellular Ltd, has to pay about Rs 50,399.63 crore in statutory dues dating back over past many years. Some within the government are, however, questioning using taxpayer money to bailout telcos who had failed to provision for statutory dues during the pendency of legal cases.
-With inputs from Reuters