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Vodafone Idea, Airtel Seek Bailout Package, More Time To Pay

As they line-up funds to pay the telecom department following the order of the Supreme Court on AGR (adjusted gross revenue) matter, stressed telecom companies Vodafone Idea and Airtel are understood to have made a series of suggestions to the government to help them tide over the difficult times. Among them is a plan to give more time to the companies to make the AGR dues payment, while also giving them access to easier funding facilitated by the government so that payments can be made accordingly.

Sources said the companies have been saying that a government bailout is essential at this point in time, especially as the relief offered by the high-powered Committee of Secretaries (CoS) — which is now disbanded — was “insufficient, and not in line with the current needs of the industry”. The CoS had given a two-year moratorium on spectrum payments to the industry, and had measured its value at Rs 42,000 crore.

Vodafone Idea chairman Kumar Mangalam Birla and Airtel chief Sunil Mittal have been holding a series of meetings with the government now, where they have particularly focused on increasing the viability of the sector. They have held meetings with high-ranking officials of the department of telecom (DoT), as well as finance ministry functionaries.

Vodafone Idea has been clear that the survival of the company hinges on a support package from the government, as the company has failed to receive any relief from the top court so far.

Interestingly, Reliance Jio — the biggest telecom company — has so far not made any particular demand for a larger bailout package, especially as it remains profitable and has been witnessing rapid growth. The stand of Jio and its potential opposition to any special package — only for the financially-weaker mobile operators — may also dissuade the government from working out a special plan only for a few. Unlike others, Jio’s AGR dues were a meagre Rs 200 crore, which it paid by January 23, the last date of payment that had been fixed by the top court.

The request of Vodafone Idea and Airtel for a relief comes at a time when the DoT is initiating steps to recover their dues, including potentially invoking the bank guarantees of the companies for failure to clear full dues. The ministry is taking legal opinion on the matter, including a view from the Solicitor General Tushar Mehta.—Times of India

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