UK-based telecom major Vodafone Group plc has infused Rs 1,530 crore (or $200 million) into debt-ridden Vodafone Idea to support managing operations amid the coronavirus crisis. The payment will also help Vodafone Idea pay statutory dues to the government.
"It has accelerated a payment of $ 200 million to Vodafone Idea, which was due in September 2020, under the terms of the contingent liability mechanism with Vodafone Idea," the London-headquartered company said in a press release on Wednesday.
Under the terms of the contingent liability mechanism (CLM), it is obliged to make payments to Vodafone Idea where amounts paid "pursuant to the contingent liabilities of Vodafone India exceed those of Idea Cellular", Vodafone Group said.
The CLM took effect at completion of the merger of Vodafone India and Idea Cellular in August 2018. Vodafone Group's potential exposure under this mechanism is limited to Rs 8,400 crore.
Vodafone Group further stated that it has accelerated this payment to support the approximately 30 crore Indian citizens who are Vodafone Idea customers as well as employees during this phase of emergency health measures, taken as a result of the COVID-19 pandemic.
"Following the decision by India's Supreme Court on the definition of Adjusted Gross Revenue (AGR) in October 2019, India's telecoms operators became liable for licence fees, penalties and interest dating back over 14 years. Vodafone Idea has made payments to the Government of India in relation to its AGR liabilities," it added.
Earlier this week, Vodafone Idea, a joint venture between Vodafone Group and Aditya Birla Group, paid about Rs 1,367 crore to the government towards licence fee and spectrum usage charges (SUC) payment for the March quarter this year.
Last month, the telco had paid Rs 6,854 crore to Department of Telecommunications (DoT) towards the AGR payments, or its full principal dues, as per its self-assessment.
While the DoT's estimate for the total AGR dues of Vodafone Idea is Rs 53,000 crore, its self-assessment estimated the total amount to be Rs 23,000 crore. Out of the Rs 23,000 crore, the telecom operator estimated its principal amount to be Rs 6,854 crore.
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today