Bharti Airtel, the second-largest telecom operator in the country, has opted to defer the additional adjusted gross revenue (AGR) dues up to FY2018-19. It is worth noting that Vodafone Idea (Vi) has done the same. Earlier, the Department of Telecommunications (DoT) had offered the telcos an option to defer the payment of AGR-related dues up till FY2016-17, as determined by the Supreme Court (SC). To offer further relief to the operators, the DoT, on June 15, wrote to the telcos about whether they would want to defer further AGR-related dues up to FY2018-19 by a period of four years. Vodafone Idea, a few days back, agreed to the same. Since the telcos had only 15 days to communicate their decision, Airtel, on June 30, 2022, agreed to defer the additional dues by a period of four years as well. Airtel announced the same via a listing on the Bombay Stock Exchange (BSE). However, the telco hasn’t mentioned the amount of the dues deferred. Regardless, it puts Airtel in a better position for the upcoming 5G investments and 4G expansion. In addition to the deferment of dues, DoT offered Airtel an option to convert its accrued interest dues into equity for the government. Airtel has opted not to do that, which makes a lot of sense.
Bharti Airtel Has the Right to Prepay the Deferred Dues
While communicating its decision to the stock exchanges, Airtel said that it has the right to prepay the deferred dues anytime it wants. The deferred dues are for four years, applicable from FY2021-22 up to FY2024-25. Airtel has already managed to make plenty of free cash flow, and the company has only opted for deferment to ensure that it has more liquid funds to fuel investments and growth. Both Airtel and Vi are now in a much better position because of the decision of the DoT to help them out with their liquidity levels. Jio, as expected, hasn’t opted for any such deferment.
