Vodafone-Idea, Airtel, Jio Pay Spectrum Dues Of More Than Rs 6,000 Crore In March
A man speaks on the phone inside a Vodafone India Ltd. store at the Infosys Ltd. Global Education Centre campus in Mysore, India. (Photographer: Dhiraj Singh/Bloomberg)

Vodafone-Idea, Airtel, Jio Pay Spectrum Dues Of More Than Rs 6,000 Crore In March

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Vodafone Idea Ltd., Bharti Airtel Ltd. and Reliance Jio have paid the government about Rs 6,000 crore in spectrum dues slated for March 3, but debt-ridden Reliance Communications has so far not deposited its dues of Rs 21.5 crore, sources said.

A source privy to the development told PTI that India’s largest telecom operator, Vodafone Idea, has made a payment of more than Rs 3,042.7 crore to the Department of Telecommunications towards its spectrum dues (that is, deferred payment installment for spectrum bought in auctions).

The due date for the payment was March 3, and Vodafone Idea made its payment on March 2, the source said.

Vodafone Idea—whose Rs 25,000-crore fundraising plan by way of rights issue recently got the cabinet nod—is slated to make its next payment of over Rs 6,000 crore sometime in April.

While Bharti Airtel made a payment of Rs 1,918 crore and Reliance Jio of Rs 1,053 crore by the due date, RCom has not yet made the payment of Rs 21.5 crore as on the due date.

The sources aware of the stipulated procedures said telecom companies are given a grace period of 10 days after the due date by the telecom department to make the payment, failing which a further decision is taken on such matters.

RCom declined to comment to an e-mail query on the issue.

A Vodafone Idea spokesperson confirmed that that the company has made the due spectrum payments but did not divulge any details.

Also read: India's Reliance Jio Could Lose $2.1 Billion This Fiscal Year: Bernstein

An Airtel spokesperson said that the company paid all its spectrum dues in full as per timelines.

A mail sent to Reliance Jio did not elicit any response.

The move assumes significance as Vodafone Idea has earlier sought two-years moratorium on annual spectrum payment of more than Rs 10,000 crore, citing high debt levels and stress on the balance sheet. In all, the amount to be paid by Vodafone Idea is estimated to be around Rs 11,900 crore this year.

Vodafone and Idea have participated in five auctions that were held in 2010, 2012, 2014, 2015 and 2016 before merging their mobile businesses. In five auctions, Vodafone alone had acquired spectrum worth Rs 79,343 crore—the highest in terms of value compared to bids made by any other operator.

Idea, too, had purchased spectrum worth Rs 63,597 crore in those auctions. After completion of the merger on Aug. 31, 2018, the spectrum payment liability is now on Vodafone Idea.

The government, in March last year, enhanced number of annual installments for spectrum payment from 10 to 16 years to provide relief to the sector, which is reeling under the debt of around Rs 7.8 lakh crore.

But the Cellular Operators’ Association of India in November again approached telecom department Secretary Aruna Sundararajan to seek additional two-year moratorium on payment of installments of spectrum won in the auctions and interest charges imposed on installments.

The industry argued that the sector lost 42 percent revenue from sales of telecom services on a quarterly basis between April-June 2016 and July-September 2018. They have said the debt level on four mobile operators is at around Rs 5 lakh crore, and 60 percent of the liability is from spectrum payment obligations.

Also read: CLSA Suggests How Vodafone Idea Can Boost Its Business

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