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Airtel chooses the 4-yr moratorium path to pay dues

Bharti Airtel, follows Vodafone Idea, in opting for the four-year moratorium for payment of adjusted gross revenue (AGR) dues and spectrum dues.

In a notification to the exchanges, Airtel said it would take both the options with immediate effect.

Last week, Vodafone Idea (Vi) had told the Department of Telecommunications (DoT) that it would opt for the four-year moratorium for the deferment of the two dues, namely the spectrum as well as the AGR dues.

A letter of acceptance has been sent by the company to the department of telecommunications (DoT).

Bharti Airtel chairman Sunil Mittal, had last month, said the company will opt for a payment moratorium and redirect the cash flow to aggressively build networks.

With regard to interest due on moratorium, Mittal had said Airtel will take a decision, on whether to go for equity conversion or pay cash, when the offer comes from the government.

In its recently announced relief package for the telecom operators, the government has offered the option to defer payment of spectrum auction instalments due up to four years, with immediate effect, excluding the instalments due for spectrum auction 2021. This option is applicable from FY23 to FY26.

These deferred amounts will be spread equally over the remaining instalments to be paid, without any increase in the existing time period specified for making the instalment payments.

Interest, as stipulated in the relevant year of the auction of the spectrum will, however, be charged so that the net present value (NPV) of the payable amount is protected.

The relief package for the sector apart from the four-year break for companies from paying statutory dues, also grants permission to share scarce airwaves, change in the definition of revenue on which levies are paid and 100 per cent foreign investment through the automatic route.