Airtel to Seek AGR Dues Waiver from Government to Ease Financial Burden

Bharti Airtel will now pursue its appeal with the government for a similar evaluation, one day after the Supreme Court ordered the government to reevaluate the adjusted gross revenue (AGR) dues from Vodafone Idea for up to FY17. In an earnings call, Gopal Vittal, the managing director and vice chairman of Bharti Airtel, informed analysts that the company is happy that the Supreme Court's recent ruling allows the government to conduct a thorough evaluation, reevaluation, and reconciliation of the AGR dues, including interest and penalties, through the fiscal year 2016–17. The order was issued in response to Vodafone Idea's plea. Airtel now intends to address the issue with the government as well.

What is AGR?

The percentage of a telecom company's gross income that is taken into account for regulatory payments is known as AGR. Telcos pay the government 8% of AGR as a licence fee, which includes 5% of AGR for contributions to the Digital Bharat Nidhi fund. The government might reevaluate and rethink all of Vodafone Idea's AGR dues as of FY17, including interest and penalties, the Supreme Court clarified on 3 November, providing the financially strapped telecom giant some much-needed respite.

However, the order solely applies to Vodafone Idea because other businesses did not petition the Supreme Court regarding the DoT's extra AGR demand for the FY17 timeframe. According to Vittal, the business has consistently insisted that the 2019 AGR ruling constituted a "body blow" to the sector. He claimed that it is even more disheartening because even calculation errors were disregarded.

Airtel Approached DOT to Convert AGR Dues to Equity

In order to provide the government a 3-4% ownership in India's second-largest telecom operator, Airtel had sought the Department of Telecommunications, or DoT, to convert its AGR dues of roughly INR 40,000 crore into equity in April. Indeed, Bharti Airtel, Vodafone Idea, and Tata Teleservices had their appeals for a relief of interest, penalty, and interest on penalty on outstanding AGR dues rejected by the Supreme Court in May.

At the time, Vittal had stated, "We simply wanted a non-discriminatory level playing field in terms of an option to convert." "The board has the last say over whether or not we convert. We requested an explanation from the government regarding our options. The telecom company led by Sunil Bharti Mittal released its September quarter statistics on November 3. A boost in mobile data usage, a growing subscriber base, and a rebound in income for the enterprise division, Airtel Business, following three quarters of declines, all contributed to the company's impressive profitability.