Debt-laden telecom operator Vodafone Idea Ltd is in fresh talks with the Centre over the recalculation of what it believes is wrong labelling of adjusted gross revenue (AGR) dues, its chairman Ravinder Takkar said during a conference call with investors on Monday.
Backing the statement at a press briefing, the Union telecom minister Jyotiraditya Scindia said the telecom major remains in talks with the communications ministry and both parties are looking for a deeper understanding of the matter.
“We have been engaging with senior government officials with a clear view from every side that merits of the case, with reference to calculation errors and mistakes, and penalties and interest on the mistakes,” Takkar said.
“The Centre has asked us to comprehensively view what we believe is the right mechanism and request for addressing the challenge because there’s a clear understanding in the government that it should not be fair to ask us to pay for a calculation error,” he added.
Funding talks
Vi’s senior executives added that it remains in discussions with banks for additional funding, including waiving bank guarantees worth ₹27,000 crore for further financing, which are “developing positively—with solutions expected in the coming weeks”.
Talks for identifying funding sources are expected sooner—within the next seven to eight weeks.
The telco currently has a net AGR liability of ₹70,300 crore, as opposed to ₹21,533 crore based on its own assessment.
AGR is a revenue-sharing model between the Centre and telecom operators, which was established in 1999 following the government’s move away from a fixed lofty licence fee model.
“Cash generation from our business will go towards paying the government debt, small bank debt and vendor dues. Deliveries of equipment for services expansion will commence by the second half of the upcoming quarter. Once the initial supplies are taken care of, further supplies will continue regularly, and a ₹10,000-crore revolving line of credit from vendors will persist,” said Akshya Moondra, the telco’s chief executive, during the investor call.
The apex court relief in the AGR issue was deemed pivotal to Vi’s future. Vi is currently in massive debt and is the only telco out of the three private ones in the country without commercially available 5G services.
On Sunday, however, Vi announced a ₹30,000-crore deal with Nokia, Ericsson and Samsung to expand its services, informing shareholders through an exchange filing that this was the first move out of the company’s six-year capital expenditure plan of ₹55,000 crore.
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