The Union Cabinet has approved a relief package for the cash-strapped telecom sector. The move is aimed at giving much-needed breather to companies such as Vodafone Idea that have to pay thousands of crores in unprovisioned past statutory dues, sources told PTI. The wide set of measures proposed entail reforms for the ailing sector by way of granting moratorium on unpaid dues, redefining AGR prospectively and cut in Spectrum Usage Charges.
The relief plan is expected to include a 4-year moratorium on payments for airwaves, will help private telecom companies especially Vodafone Idea which is confronting an existential crisis. Telecom Minister Ashwini Vaishnaw is slated to brief the media shortly on decisions taken by the Union Cabinet at its meeting held on Wednesday. The relief package for the ailing sector could allow telcos to convert interest on spectrum dues of the moratorium period into government equity.
VIL, which was created from the merger of British telecom giant Vodafone’s India unit and Birla’s Idea Cellular Ltd, has to pay about Rs 50,399.63 crore in statutory dues dating back over past many years.
The Centre’s move came nearly a month after Kumar Mangalam Birla stepped down as non-executive director and non-executive chairman of Vodafone Idea. In June, the Aditya Birla Group chairman had written a letter to the Government of India in which he offered to hand over his stake in Vodafone-Idea (Vi) to any public sector entity considering the “looming crisis” before the telecom operator.
“It is with a sense of duty towards the 270 million Indians connected by Vodafone Idea, I am more than willing to hand over my stake in the company to any entity—public sector/government /domestic financial entity or any other that the government may consider worthy of keeping the company as a going concern,” Birla said in the letter, parts of which were reviewed by Mint.
Vodafone Idea had expressed its inability to pay the telecom department the instalment of ₹8,292 crore that was due on April 9, 2022, since the company’s cash was being used for payment of AGR dues.