Vodafone Idea's next AGR payment is due in March. DoT officials don't think telco can pay up

The Department of Telecommunications (DoT) is concerned about Vodafone Idea's ability to meet its upcoming statutory payment obligations, with officials warning that the latest Supreme Court ruling has put a big question mark on the debt-laden telco's survival.
"Vodafone Idea has made its payments so far but there have been delays in some of the quarterly dues. But now there is a big question on survival," a senior official told ET. "They have a large chunk of spectrum instalments due in a few months as well."

The company had written to DoT secretary Anshu Prakash on June 25 requesting another year - till April 2023 - to pay its dues of Rs 8,292 crore over spectrum purchased in auctions. "Now it depends if the government decides to provide the telcos with moratorium relief but that is not an easy option. How long and how many times can the government support one operator? And in the interim, how will the operator pay its dues?" said another official. The telco also needs to look inwards at its operations to run it more efficiently, given how rivals Bharti Airtel and Reliance Jio are managing, he added.

Vodafone Idea didn't respond to ET's queries till press time.

Besides the spectrum payments, Vodafone Idea - which posted a net loss for the fiscal fourth quarter at Rs 6,985.1 crore - needs to pay around Rs 9,000 crore to the DoT by March 2022 towards its first instalment of adjusted gross revenue (AGR) dues. This, after the Supreme Court on Friday, refused to allow Vodafone Idea to approach the DoT to correct errors claimed by the company in the department's calculation of AGR dues. It had hoped that if the correction was allowed, its AGR dues would be reduced to half.

Overall, Vodafone Idea owes the government Rs 96,270 crore in spectrum payment dues and Rs 58,254 crore in AGR liabilities, of which Rs 7,854 crore has been paid. The telco's cash balance as of March-end was Rs 350 crore, and it had admitted to the DoT that its operations were not generating sufficient cash.

"They are finding it difficult to raise funding...this order may put off more investors," the official added.