Cabinet Approves 4-Year Moratorium For Telecom Companies To Pay Dues

Mumbai: Cabinet on Wednesday announced a moratorium of four years on telecom dues, including adjusted gross revenue (AGR) dues owed to the government, as part of a relief package for the sector.

Those availing the moratorium will have to pay some interest, Minister Ashwini Vaishnav announced. The cabinet said the adjournment would start from October 1.

“The reforms are deep and widespread. They are structural. These reforms will bring about change today, tomorrow and in the future. I do not like to put numbers on the package as it is revenue-neutral for the government,” the minister said.

The minister said the moratorium will not affect the government’s revenue.

The relief package will include a moratorium on airwave payments and is aimed at helping Bharti Airtel, Reliance Jio and Vodafone Idea. Shares of wireless carrier Bharti Airtel were up 5.4% and Vodafone Idea by 2.9% after the news broke.

The relief package for the ailing sector, in which telecom companies can have the option to convert interest on spectrum dues into government equity for a moratorium period of four years, was long overdue.

The package comes six weeks after Kumar Mangalam Birla resigned as the chairman of Vodafone Idea Ltd on August 4. Vodafone, which was created out of the merger of British telecom giant Vodafone’s India branch and Birla’s Idea Cellular Ltd, will have to pay around ₹50,399.63 crore in statutory dues dating back over past many years.

The relief package for the ailing sector, in which telecom companies can have the option to convert interest on spectrum dues into government equity for a moratorium period of four years, was long overdue.

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