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Vi to submit a detailed plan to raise further funds and deadline on meeting the quarterly dues
The Department of Telecommunications (DoT) is likely to give Vodafone Idea (Vi) up to 60 days to raise fresh funds and invest in the company, before it asks for the pending third quarter dues that the company owes to the government, officials said.
“The company has agreed to prepare a detailed plan to raise further funds and increase investments. Therefore, it has been decided that sufficient time would be given to it before the government inquires about the quarterly dues owed by it,” an official said.
While there is no clear decision on the time period, it would be 45-60 days, he said.
Every quarter, Indian telecom operators must pay 8 percent of the adjusted gross revenue as the License Fee (LF), of which, 5 percent is set aside as a contribution to the Universal Service Obligation Fund.
An additional 3-4 per cent is paid each quarter as Spectrum Usage Charges (SUC) for spectrum acquired before September 15, 2021.
For the third quarter of the current financial year, Vi has paid less than 10 per cent of its requisite dues, officials said. But this does not attract penalties since the total dues are calculated and audited on an annual basis.
Telcos have earlier cleared large parts of their dues through a single annual payment, at the end of a financial year, people in the know said. As a result, the government can only nudge Vi for the third quarter dues at the moment, they added.
Meanwhile, the Cellular Operators Association of India (COAI) has urged the government to reduce the LF to 1 percent so that the outgo of cash for the telcos reduces and could be invested more into network expansion activities.
Officials however indicated that the government is not keen on changing the existing incidence of fees and charges.
“The government has already worked on this, telcos will increasingly earn more from their 5G spectrum, which does not carry SUC,” another official said.
Eyes on Vi
Officials however said the company would be asked to provide its own deadline on meeting the quarterly dues.
“After a long period of discussion, the government has cleared the necessary steps needed for the company to reduce a significant portion of its overall dues to the government. We will also allow it to provide us a timeline of when the quarterly payments would go back to their optimum level,” the official mentioned above said.
After a long wait, the financially stretched telecom service providers managed to secure a lifeline on February 3, when the Centre finally approved the conversion of the telco’s dues linked to interest on spectrum and adjusted gross revenue (AGR) worth Rs 16,133 crore into equity.
On February 7, Vi issued 16,130 million equity shares to the Department of Investment and Public Asset Management (DIPAM) under the Finance Ministry, giving it a 33.4 per cent stake in the company.
The development came nearly 13 months after the Vi board cleared the interest conversion.
With this, the government will have a 33 per cent stake, making it the biggest shareholder in the financially-stressed telecom joint venture between UK’s Vodafone and Kumar Mangalam Birla-owned Aditya Birla Group. Business Standard
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