Reliance Jio Infocomm (Jio) has refused to take the government’s moratorium on spectrum and adjusted gross revenue (AGR) payments , becoming the only telco to do so. Jio’s refusal comes at a time when both rivals Bharti Airtel and Vodafone Idea (Vi ) have accepted both forms of moratorium.
Earlier, Jio paid Rs 10,792 crore to the Department of Telecommunications (DoT) for 269.2 MHz of spectrum it acquired in 2016.
While Jio had made upfront payments, it has dues of Rs 15,000-16,000 crore towards spectrum it acquired in 2014 and 2015.
Bharti Airtel has already decided to opt for a four-year moratorium on spectrum and adjusted gross revenue (AGR) dues payable to the government. Vodafone has also taken a decision to opt for a moratorium on spectrum dues and has to communicate its stance on AGR dues.
Ironically, Jio’s refusal comes the same day as Vi accepting the 4 year AGR moratorium. Brokerage firm Nomura, in a report had estimated the Mukesh Ambani led telco to get a Rs 4,300 crore annual cash flow relief by opting for the spectrum moratorium.
Jio had acquired a significant amount of airwaves in 800 MHz and 1800 MHz bands in 2015. It had purchased spectrum in 1800 MHz band in the previous year which enabled it to pan-Indian services in 2016. A deferral in spectrum and AGR dues will allow the telcos to deploy revenue for network improvements and new technologies. The DoT has given 90 days time to the companies to consider the option of converting the interest that will accrue during the moratorium period into equity.
The government has also informed the telcos about modalities of debt-to-equity conversion, the relevant date for pricing the shares, and the pricing formula, among others.
On September 15, the Union Cabinet approved a relief package for the telecom sector that included a four-year moratorium on AGR and spectrum payments. It also included reduced bank guarantees and the option of converting operators’ principal statutory dues into equity at the end of the moratorium period – or after four years.
