New Delhi: The government should grant telecom companies a three-year moratorium followed by an extended timeline for payment of all statutory dues at easier interest rates, as the telecom sector is reeling under massive losses after the Supreme Court ruling on AGR liabilities, the Cellular Operators Association of India (COAI) said Monday.
COAI director general Rajan Mathews told this agency that operators need ‘oxygen’ and urged the government to take a call on debt restructuring of all the dues that telecom operators owe to the government.
Mathews said most 4G licences have 11-year validity left, and that the government could pack in another 10 years, thus allowing operators to pay back all the outstanding dues spread over the entire licence period. “It is also time to redefine AGR (adjusted gross revenue) prospectively,” Rajan Mathews said.
The telecom industry has been haemorrhaging, with combined losses of listed mobile network firms surpassing Rs 1 lakh crore in the September-ended quarter.
Last week, India’s two leading telecom operators Vodafone Idea and Bharti Airtel reported a combined loss of Rs 74,000 crore for the second quarter ended September 2019, mainly on account of statutory dues arising from the recent Supreme Court order on AGR.
While Vodafone Idea posted a loss of Rs 50,921 crore, the highest-ever quarterly loss by any company in India, Airtel reported a loss of Rs 23,045 crore.
In another development Friday, Reliance Communication posted a consolidated loss of Rs 30,142 crore for the July-September 2019 period due to provisioning for liabilities after the Supreme Court ruling on statutory dues — marking second-highest loss posted by any Indian company till date.
Airtel, Vodafone Idea and other telecom operators have to pay the government a whopping Rs 1.4 lakh crore following the Supreme Court order that has sent shock waves through an industry already grappling with past losses and billions of dollars in debt.
According to latest estimates by the telecom department, Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore. The remaining liability is with state-owned BSNL and MTNL and some of the shut or bankrupt telecom companies.