India’s second biggest telco by subscribers, Vodafone Idea, will pay $1.4 billion (10,000 crore rupees) towards its outstanding AGR dues today, according to reports in the Indian press.
The Economic Times of India quoted sources familiar with the matter as saying that the beleaguered telco would make the payment on Thursday to the Department of Telecoms, as partial payment of its outstanding dues.
Vodafone Idea owes the DoT around $7.4 billion (53,000 crore rupees), $3.2 billion (23,000 crore rupees) of which relates to the landmark Supreme Court ruling that compelled Indian telcos to recalculate their adjusted growth revenues(AGR). The DoT uses AGR as a financial metric to calculate spectrum usage charges.
Of the $3.2 billion owed as a result of the AGR ruling, Vodafone Group estimates that only around $900 million is the principal amount, with the remaining $2.3 billion being penalties and charges.
Earlier this week, Vodafone Idea’s rival telco, Bharti Airtel, confirmed that it had made payment of $1.4 billion (10,000 crore rupees) towards its outstanding AGR dues. Bharti Airtel is now in the process of completing a self-assessment exercise to ascertain exactly how much it still owes. Airtel says that it will complete the self-assessment exercise and make payment of the outstanding dues by the middle of March
India remains one of the world’s most competitive telecoms markets, with operators struggling to subsist on wafer thin margins, despite the epic scale of the country’s telecoms sector.