Government's decisions will help telcos to avoid an immediate outflow of over Rs 42,000 croreTelecom stocks are witnessing profit-booking after the Cabinet's nod late Wednesday for a two-yearmoratorium on spectrum-related dues.
The four-day rally till yesterday screeched to a haltas the government decision failed to enthuse the investing community.
At 1.15pm, Bharti Airtel had weakened by 2.8% at Rs 424, Vodafone Idea had shed 5.3 per cent to Rs 6.69 and Reliance Industries, the parent company of Reliance Jio, had inched lower by 0.5% at Rs 1537, on the BSE.Finance Minister Nirmala Sitharaman had announced late November 20 that the Cabinet approved deferring receipts due from Telecom Service Providers (TSPs) for spectrum payment for a period of two years.
The deferral of spectrum dues payment for financial years, 2021 and 2022, and extension of payment instalments from 16 to 18 will help telcos to avoid an immediate outflow of over Rs 42,000 crore.
The government decision will help Bharti Airtel to prevent outgo to the tune of Rs 11,746 crore, while Vodafone Idea and Reliance Jio stand to benefit by Rs23,920 crore and Rs6,670 crore respectively.On the other hand, the 3-month deadline to pay the (adjusted gross revenue) AGR dues still holds as it is a legal issue and any extension can only be granted under the direction of Supreme Court.
Going by the Supreme Court judgement, telcos owe Rs 1.47 lakh crore, including license fees (Rs 92,642 crore) and spectrum usage charge (Rs55,054.51 crore).In a related development in thebeginning of this week, Bharti Airtel and Vodafone Idea had announced their intention to hike the tariff rates from December 1.
Reliance Jio, the fully owned subsidiary of Reliance Industries, also announced similar plans, without indicating any timeline.(Except for the headline, this story has not been edited by TheIndianSubcontinent staff and is published from a syndicated feed.)Get Breaking news, live coverage, and Latest News from India and around the world on TheIndianSubcontinent.com.
Catch all the Live TV action on TheIndianSubcontinent 24x7 and TheIndianSubcontinent India.
Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.