Vodafone-Idea (VI) finds some relief in the Central Cabinet's decision. On Wednesday, the Central Cabinet led by Narendra Modi approved a long-awaited relief package for this telecom operator in the country. According to news agency PTI sources, this decision has temporarily suspended the company's Adjusted Gross Revenue (AGR) dues. The total amount of these dues is approximately Rs 87,695 crore.
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Cabinet decision allows staggered repayment of massive AGR dues
Following this decision, Vodafone-Idea will not have to make any AGR-related payments immediately. VI will get 10 years to clear these dues. Vodafone has been given the opportunity to clear these dues in phases between the financial years 2032 and 2041. However, Vodafone will have to clear AGR dues for the financial years 2018 and 2017 between the financial years 2026 and 2031. According to PTI sources, no changes are being made to the amount of dues for this period.
Experts believe this government decision could bring significant relief to Vodafone Idea's financial condition. This telecom company had been under pressure regarding AGR dues for a long time. This massive liability, including interest and penalties, was creating obstacles in the company's cash flow and investment plans.
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Even after this Cabinet approval, Vodafone-Idea's share price did not improve. The company's share price fell 15 percent from the last closing to Rs 10.25. However, according to some investors, this Cabinet decision has increased the company's chances of survival in the competitive market. Additionally, Vodafone will get opportunities to invest in network development and customer service.
Due to the AGR dues problem, Vodafone Idea had sought government assistance multiple times before. However, no complete official statement has yet been issued regarding the detailed conditions of this relief package and how it will be repaid. According to experts, this decision is important for the stability of the telecom sector. This will maintain competition and customers may also benefit in the long term.
