British telecom major Vodafone on Wednesday said it has sought waiver of interest and penalty from statutory dues demand raised by the government from Vodafone Idea, and a time of 10 years to pay only the principal amount with a two-year moratorium. The Supreme Court in October upheld the demand raised by the government from telecom operators to pay levies on the revenues earned by them.
Vodafone Idea Ltd (VIL), in which Vodafone holds 45.39 per cent stake, is staring at unpaid statutory dues of Rs 53,038 crore, including Rs 24,729 crore of spectrum dues and Rs 28,309 crore in licence fee, and has already warned of shutdown if no relief is given. "Specifically, we have requested an immediate two-year moratorium on spectrum payments, lowering of licence fees and taxes, waving off interest and penalties on the AGR (adjusted gross revenue) case and ability to make the payment on principal over 10 years with a 2-year moratorium," Vodafone Chief Executive Officer Nick Read said during investors presentation.
In January, the Supreme Court rejected the review petition filed by VIL and other industry participants in relation to the AGR judgment. Both VIL and Bharti Airtel have subsequently filed modification petitions to request the court to order the Department of Telecommunications to determine a payments schedule in relation to AGR dues and other reliefs.
VIL is actively seeking various forms of relief from the Centre to ensure that the rate and level of payments it makes to the government is sustainable and it can meet its other commitments also. "Following the AGR ruling of the Supreme Court, the situation in India is critical. The telecom industry in India has asked the government to take action urgently in order to support the continuation of three (private operators) plus one (public firm) player market," Read said.
Vodafone in November wrote off the carrying value of its share in the loss-making joint venture. Read reiterated that there is no change in the Vodafone position announced in November and the company will not inject any additional capital in the Indian market. He said procedural delay in the merger of Indus Towers with Bharti Infratel is putting Vodafone Idea under "incredible strain".
Bharti Infratel and Vodafone India hold 42 per cent stake each in Indus Towers. VIL holds an 11.15 per cent stake in the mobile tower firm which it plans to sell off once the merger is complete. Bharti Infratel on December 24 had extended the deadline for the second time for the merger with Indus Towers by two more months to February 24, as it did not receive the necessary government approval.