Staggered payment plan may give telcos time to raise funds

NEW DELHI: A rescue package for stressed telecom companies may be cleared by the Union Cabinet later this week and could include a staggered payment schedule for the outstanding AGR (adjusted gross revenue) dues. Relief on the licence fee front may also come up for review as the government takes stock of measures aimed at nursing the telecom industry back to health.Top sources said the telecom department is in the process of preparing a “bailout package” for the companies in tandem with officials in the finance ministry and Niti Aayog. The relief is being worked out as the next date of hearing on the telecom matter comes up in the Supreme Court on March 17, by when the government and the mobile operators need a roadmap for paying the massive AGR dues.“We are enthused by the willingness of the companies to start making payments towards their outstanding AGR dues. While the government wants to abide by the orders of the Supreme Court, which remains the top priority, it also wants to ensure that there are no monopolies that are created in the sector, and that all the companies are given a viable option to pay back the massive dues,” one of the sources said.A staggered payment schedule may give companies time to raise funds and pay back the massive dues demanded from them. There could be an interest that could be demanded on such staggered payments, the source said. The licence fee is currently fixed at 8%, and this may be reduced in line with the recommendations made by Trai previously.The Digital Communications Commission (DCC), the high-level multi-ministry body seized of telecom matters, has already discussed various bailout options for the beleaguered telcos that need to pay a cumulative Rs 1.47 lakh crore to the telecom department in line with the SC’s order. Its views have been finalised and will be considered by the Cabinet.The majority of burden of the AGR dues has fallen on Vodafone Idea, which needs to pay Rs 53,000 crore but has so far managed to give only Rs 3,500 crore. Airtel, which was asked to pay Rs 35,586 crore, has so far paid Rs 18,004 crore (balance Rs 17,582 crore), while Tata group has to give Rs 13,823 crore but has paid only Rs 4,197 crore (balance Rs 9,626 crore).The companies have submitted their self-assessment numbers on the AGR dues and have disputed the telecom department’s demand notice.However, another source in the government said that the telecom department “stands with the dues demand” made by it, adding that it will not be able to reconcile numbers with the self-assessed estimates of the companies before the SC’s next hearing. “We are confident about our numbers, a large part of which have been audited by a CAG team. Also, it may not be possible to ratify each and every number with the estimates presented by the telcos so soon. This is a lengthy process and may take at least six months.”A bailout package is seen as necessary for the companies to survive. While Airtel has said that it wants to pay the money demanded by the telecom department well before March 17, Vodafone Idea has made it clear that it will fail to make the payment if a relief package is not extended.Vodafone Idea chairman Kumar Mangalam Birla has already met finance minister Nirmala Sitharaman and telecom minister Ravi Shankar Prasad on the matter.Last week, Nick Read, the global CEO of Vodafone, also held a meeting with the two senior Cabinet ministers, telling the government that the British telecom major wants to stay invested in India. Seeking a rescue package, Read conceded that Vodafone Idea made a mistake by not paying the higher AGR amount previously.