Telcos can defer annual AGR dues by 4 years, DoT may tell SC

As per the annual compliance report the government needs to submit to the Supreme Court each year, DoT will also inform that because of the deferral in payment timelines, bank guarantees (BGs) would also be returned to the carriers, a senior government official told ET.

“Telcos will also have to file this to the Supreme Court on April 7, in accordance with the Supreme Court order that had asked for an annual update on AGR dues,” the official said. The DoT will also inform the court of its decision to return all BGs to telcos, since the AGR payment against which the BGs were held has been secured.

“The government has the option to convert the dues into government equity after four years,” the officer explained.

The DoT is informing the court about the BGs along with the update on AGR dues as close to ₹8,000 crore worth Vodafone Idea’s BGs are set for expiry around early April and the telco has repeatedly reiterated its inability to raise more guarantees from banks.

As reported by ET earlier, BGs worth about ₹15,000 crore belonging to Vodafone Idea (Vi) have been withheld by the government and the figure for Bharti Airtel is ₹7,000-8,000 crore. The BGs held back had been furnished against the spectrum payments of telcos.

Vi has urged the government to urgently release its BGs as the loss-making telco is desperately trying to raise funds to invest in its 4G network to better compete with stronger rivals Reliance Jio and Airtel and stem subscriber losses.

People familiar with the matter said the DoT had drafted a cabinet note for issues concerning the return of BGs, but it was withdrawn as many in government felt that it was well within the ambit of the telecom relief package to allow the return of all BGs, including those withheld against the AGR dues.