Vodafone Idea likely to get extension to pay Q1 spectrum and licence fees

The govt is of the view that the troubled VI should be given adequate time to raise funds, especially now that potential investors are comfortable knowing that the govt is also taking equity in VI

Vodafone Idea (VI) is likely to get an extension for clearing the license fee and spectrum usage charge from the Department of Telecommunications (DoT) for the first quarter of the financial year 2023-24, The Economic Times (ET) has reported citing officials in the know.

The government is of the view that the troubled VI should be given adequate time to raise funds, especially now that potential investors are comfortable knowing that the government is also taking equity in Vodafone Idea, the official aware of the subject told the newspaper.

VI has failed to make full payments of the levies at the designated time of payment for the past three quarters. However, the firm has been clearing its dues on time as per the extended timeline granted to it by the DoT.

Government officials told ET that since the company is paying interest on delayed payments, it is not a problem. An unnamed official was quoted in the report as saying, "It has been a few months since the government has taken equity in the company. Vodafone Idea is trying to sustain itself and it should be supported, so that the telecom sector remains healthy."

Another government official said that extending timelines for making statutory payments along with interest for the delay has not been done for VI specifically. Rather, it is a part of the government policy, the official added.

Telecom companies pay 8 per cent and 34 per cent of their adjusted gross revenue (AGR) as license fees and spectrum usage charges (SUC), respectively. However, the ET report said that the SUC part of the payments is going down rapidly with the introduction of 5G airwaves bought by telcos, including VI, which attracted zero SUC.

VI struggled to raise funds, and its customer base was depleting. To make things easier, in February, the telecom department converted VI's accrued interest on deferred adjusted gross revenue (AGR) dues worth Rs 16,133 crore into equity, the report stated.