Sunil Mittal opts for a four-year moratorium on AGR Payments and spectrum. The company is likely to save Rs 40,000 Crore with this decision.

Following Vodafone’s decision to opt for the 4-year moratorium, Sunil Mittal, Owner of Bharti Airtel announces the company’s resolution to go for the same on AGR (adjusted gross revenue) payments and spectrum.

Airtel spokesperson commented that the company would be taking the 4-year moratorium with the option of prepaying as per NIA (notice inviting application) norms.

Earlier the Government of India had declared the deadline to pay the dues as Oct 29^th. The Government had introduced reforms that enabled reducing bank guarantees (BGs) considerably and also lowering litigation in the telecom industry. These measures have been a relief to many struggling private operators.

With the bank guarantees (BGs) sharply reduced and the DoT working on measures to reduce litigation in the sector, the Government has indeed paved the way for Indian Telecom companies to take a breather. They are now in a position to rework their strategies and find solutions to their financial hurdles.

Airtel has taken a timely decision which will enable freeing nearly Rs 40,000 crores of its cash flow. This amount will be channelised to improve the company’s financial stability by the improvisation of new plans. It is also assumed that the extra cash flow will be invested in developing the 5G spectrum network.

Vodafone is likely to save Rs 60,000 crores with this move. Both the telecos will benefit from their new decision to opt for the 4-year moratorium. However, they have not revealed any information regarding whether the accrued interest on dues will be converted into equity for the Government. There is a time frame of 90 days to make a decision and we have to wait to know what measures will follow.

Bharti Airtel will soon be declaring their stand on the accrued interest and will shortly inform the Department of Telecommunications what the much-awaited decision will be.