Govt starts work on readying relief package for Vodafone Idea

NEW DELHI: Days after the Supreme Court gave a ruling on the Vodafone Idea AGR matter, Govt has begun work to find a solution to the over Rs 83,000 crore liability of the telco. Department of Telecom (DoT) is set to take legal advice on the way forward and once secured, it will instruct all field officers across the country’s mobile circles to look at possible calculation errors and duplication in billing in the original dues demand that had been issued to the company, top sources told TOI. Apart from the recalculation exercise, DoT officers have also started work on a plan that may see a direct reduction in the interest and penalty burden on the company, something which was also part of the discussions in the apex court as measures to save the company from going down. A final package – comprising recalculated AGR dues as well as relief on interest and penalties – is likely to be placed in front of the Union Cabinet over the next few months. The sources said govt wants to expedite the exercise in view of the urgency of fund management for Vodafone Idea, which still bleeds from losses and has severe financial constraints in executing a full-fledged revival plan to compete effectively against larger rivals Reliance Jio and Bharti Airtel. “We are ambitious and are looking to close the exercise over the next few months. The department of legal affairs is being approached to study the Supreme Court order so that the way forward can be qualified. This is being done on an urgent basis as the company’s expansion and competitive needs need to be factored in,” one of the sources said. The exercise to reassess the original demand (principal) raised towards the AGR liability is seen as critical as any cut here will automatically lead to a reduction in the interest, penalty on interest, and interest on penalties. “When completed, this exercise itself may see a reduction in the total AGR demand raised on the company. A reduction in the principal means that the resultant interest and penalties also come down.“ Meanwhile, Vodafone Idea on Monday said its consolidated net loss narrowed to Rs 5,524 crore in the second quarter ended Sept compared to the year-ago period, mainly on account of savings in finance cost on debt from banks and an increase in average revenue per user supported by a tariff hike. VIL had posted a net loss of Rs 7,176 crore in the year-ago period, according to the company’s regulatory filing.