Telecom players Airtel and Vodafone Idea could get another shot in the arm after the Indian government filed an affidavit in the Supreme Court to withdraw all pending cases against the companies related to spectrum usage charges.
According to the cases filed by the Department of Telecommunications (DoT), Airtel’s one-time spectrum charges (OTSC) liability comes in at ₹8,414 crore, while Vodafone idea’s stands at ₹4,390 crore, together accounting for nearly ₹13,000 crore.
“The central government is desirous of reviewing and or reconsidering his decision to proceed with the present proceedings of appeal,” stated a report, quoting the DoT affidavit.
Reacting to the news, Airtel and Vodafone Idea’s shares saw a sharp spike – while Airtel was up by over 2% at 12:30 p.m., Vodafone Idea’s shares surged by over 4%.
Both Airtel and Vodafone Idea had provided for OTSC liability in their books, and if the government’s request is approved by the Supreme Court, they will merely have to reverse the provisions made in their books.
But beyond this, both Airtel and Vodafone Idea are still staring at cumulative adjusted gross revenue (AGR) dues to the tune of ₹76,000 crore. This is after each telco has already repaid a part of the dues.
The decision to withdraw the OTSC demand is in addition to the telecom relief package that was announced last month, allowing telcos to avail a four-year moratorium on AGR dues. Business Insider