Let Telcos Pay AGR Dues Over 20 Years: DoT

As the Union cabinet took stock of the telecom crisis on Friday, the telecom department (DoT) moved a proposal to allow companies to make interest-free adjusted gross revenue (AGR) payment of Rs 1.47 lakh crore over 20 years. Companies will not have to pay interest beyond October 24, 2019, the day when the Supreme Court gave its judgement on the matter.

In addition, DoT has recommended a government guarantee to help telecom companies, such as Bharti Airtel and Vodafone Idea, get loans from state-run banks for funding 15% of their dues, sources told TOI.

Over the years, the government has been selective in offering sovereign guarantee even to public sector companies in accessing funds with Air India forced to knock on several doors each time it wants to get a cover to access loans to keep its operations running.

The SC is due to next hear the case on March 17 and DoT officials are scrambling to work out a bailout package for telcos.

‘Impossible to verify telcos’ calculations’

Source said, DoT’s proposal recommends that all telecom licencees impacted by the Supreme Court judgment should “be allowed to pay the unpaid, or remaining to be paid, amount of past DoT assessed/calculated dues in annual instalments over 20 years (or less, if they so opt), duly protecting the net present value (NPV) of the said dues using a discount rate of 8% (based on one-year Marginal Cost of Lending Rate of SBI which is currently 7.75%)”.

The cabinet proposal was prepared after a series of meetings within the DoT, which was also discussed by the multiministry Digital Communications Commission (DCC) that has members from the ministries of finance, telecom, IT and Niti Aayog.

―Times of India