scorecardAirtel and Vodafone surge after reports that government may defer AGR payments
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Airtel and Vodafone surge after reports that government may defer AGR payments

Airtel and Vodafone surge after reports that government may defer AGR payments
Business2 min read
  • 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.
The Indian government has reportedly approved the highly-awaited telecom relief package, offering a moratorium of four years on adjusted gross revenue (AGR) and spectrum dues.

Reacting to the news, shares of both Vodafone Idea and Airtel spiked by as much as 5%, on Wednesday. These two telcos are the most-impacted telecom providers by the Supreme Court’s AGR verdict. 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.

Vodafone Idea’s shares have rallied by over 44% in September alone.


Airtel, on the other hand, has rallied by nearly 10% in the same period.


What is AGR?

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:

Company

Total AGR demand (in crore)

AGR dues paid (in crore)

Balance AGR dues (in crore)

Vodafone Idea

₹58,254

₹7,854

₹50,339

Airtel

₹43,980

₹18,004

₹25,976


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 The Economic Times, the telco will have to pay ₹14,000 crore annually towards spectrum payments, taking its annual liability to ₹19,000 crore.

SEE ALSO:

Government picking up a stake in Vodafone Idea ‘might be a remedy worse than the disease’, say experts

Yes Bank, SBI and others want Vodafone Idea to be saved, here’s why

JioPhone Next is the new weapon in Ambani’s arsenal as he takes aim at the 500 million subscriber mark

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