Vodafone Idea: Revitalising spectrum

Vodafone Idea, India’s largest telecom company is considering to pay spectrum dues worth Rs 3,000 later this week, for the airwaves it bought in the previous auctions, to avoid bank guarantees being invoked and possibly send a signal that the company has no intention of deliberately defaulting on its statutory liabilities.

Tuesday is the deadline for this payment, and a telco gets a grace period of 10 days, after which notices are sent and bank gurantees invoked.

Paying the spectrum dues on time will send a strong signal about the company’s intent to honour financial commitments. in cases where it is unable to do so, it is because it is under immense financial stress.

Vodafone Idea is yet to pay the telecom department adjusted gross revenue (AGR) dues of around Rs 53,000 crore.

It has so far paid Rs 3,500 crore and is hoping for some relief, without which it has warned it may have to shut operations.

AGR payment is mandated by the Supreme Court ruling last year and for Vodafone Idea, it is necessary to pay its dues to stay relevant in world’s largest internet users market.

The company is trying to make further additional payments. It has asked the government to give it 15 years to pay up its AGR dues, after a three-year moratorium, besides a GST refund of Rs 8,000 crore which can be adjusted against its AGR liabilities.

It has also asked for a reduction in licence fees and spectrum usage charges (SUC), among other relief measures, to help it remain viable.

Meanwhile, Airtel and Reliance Jio added 1.4 million and 2.95 million active connections, respectively, in December, Vodafone Idea lost 1.1 million. India added 3.43 million active mobile connections in December 2019. The top three telecom operators accounted for about 93% of all active connections.

In terms of the number of connections, Reliance Jio leads with 370.02 million connections, followed by Vodafone Idea with 332.6 million connections. BSNL and Reliance Jio added 0.43 million and 0.08 million connections respectively.

On the other hand, Vodafone Idea lost over 3.6 million connections

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