The payment was due in September 2020 under the terms of the contingent liability mechanism with Vodafone Idea
British telecom giant Vodafone PLC on Wednesday said it has advanced infusion of $200 million (about ₹1,530 crore) in its Indian joint venture with Aditya Birla Group, that is facing a humongous liability of past statutory dues.
The amount is relatively small when seen in the context of over ₹58,000 crore liability that the cash-strapped Vodafone-Idea Ltd faces just on account of past statutory dues as a fallout of a Supreme Court decision.
Vodafone Group, in a statement, said it has “accelerated this payment to provide Vodafone Idea with liquidity to manage its operations, and to support the approximately 300 million Indian citizens who are Vodafone Idea customers as well as the thousands of Vodafone Idea employees during this phase of emergency health measures, taken as a result of the COVID-19 pandemic.”
“Vodafone Group announces that it has accelerated a payment of $200 million to Vodafone Idea, which was due in September 2020 under the terms of the contingent liability mechanism with Vodafone Idea,” the statement said.
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Consequent to the decision by the Supreme Court on the definition of Adjusted Gross Revenue in October 2019, India’s telecom operators became liable for licence fees, penalties and interest dating back over 14 years, it further said.
“Vodafone Idea has made payments to the Government of India in relation to its AGR liabilities. Under the terms of the CLM (contingent liability mechanism), Vodafone Group is obliged to make payments to Vodafone Idea where amounts paid pursuant to the contingent liabilities of Vodafone India exceed those of Idea Cellular. The CLM took effect at completion of the merger of Vodafone India and Idea Cellular in August 2018,” it added.
The move comes at a time when the telecom industry is staring at massive AGR dues. These dues arose after the Supreme Court, in October last year, upheld the government’s position on including revenue from non-core businesses in calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.
The Department of Telecommunications (DoT), as per its own submission to the apex court last month seeking relief in payment tenure, had put dues of three companies Bharti Airtel, Vodafone Idea and Tata Group at ₹1.19 lakh crore.
The dues estimated by DoT for Bharti Airtel and Telenor was pegged at ₹43,980 crore, while that of Vodafone Idea was ₹58,254 crore, and Tata Group of companies at ₹16,798 crore. Against this, Bharti Group had calculated its dues at ₹13,004 crore, Vodafone Idea at ₹21,533 crore and Tata Group of companies at ₹2,197 crore.
In March, following an approval by the Cabinet, an application was moved before the Supreme Court (on March 16, 2020) seeking its permission for the licensees impacted by the AGR judgement to pay the unpaid amount of past DoT assessed/calculated dues in annual instalments over 20 years.
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