- The first details of the
telecom relief package are finally here. - The government has reportedly offered a four-year moratorium on adjusted gross revenue (AGR) dues.
- Both Vodafone Idea and Airtel’s shares rallied, reacting to the positive news.
Reacting to the news, shares of both $4 and Airtel spiked by as much as 5%, on Wednesday. These two telcos are the most-impacted telecom providers by the $4. This was first reported by CNBC TV18.
A formal announcement is expected at a press briefing post the cabinet meeting later today, likely to be addressed by the current telecom minister, Ashwini Vaishnaw.
$4 have rallied by over 44% in September alone.
Airtel, on the other hand, has rallied by nearly 10% in the same period.
In 1999, the government and telecom operators shifted to a revenue-sharing fee model that requires them to share a part of their adjusted gross revenue (AGR) with the government as annual license fee and spectrum usage charges.
AGR is defined in the license agreements entered between the Department of Telecommunications (DoT) and the telecom operators.
Here’s how much Vodafone Idea and Airtel owe the government in the form of AGR dues:
Source: AGR dues case in the Supreme Court
Vodafone Idea also pays approximately ₹5,000 crore per year towards licence fee and spectrum usage charges. Additionally, according to a report by $4, the telco will have to pay ₹14,000 crore annually towards spectrum payments, taking its annual liability to ₹19,000 crore.
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