Airtel and Vodafone surge after reports that government may defer AGR payments
- 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.
AdvertisementThe 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)|
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.
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
Popular on BI
- BJP leading in 155 of 230 seats in Madhya Pradesh, Congress ahead in 72
- Rajasthan assembly polls: BJP surges ahead of Congress to take lead
- FPIs infuse Rs 9,000 cr in equities in Nov; inflow in debt at 6-yr high
- Artificial Intelligence in Marketing
- Souvenirs from Hampi: 8 must-buy treasures to remember your journey