Home / Business / Voda Idea AGR fees could rise further

Voda Idea AGR fees could rise further



KOLKATA: Vodafone Idea's estimated AGR-related fees of Rs 44,200 crore could rise sharply, entail additional provisions and stretch its balance sheet further, if the method adopted by the telecom department to calculate such debts is different, analysts say.

ICICI Securities said that during an analyst call on Friday, Vodafone Idea had stated that it had "estimated its adjusted gross income (AGR) at R200 4400 crore (including penalties and interest rates) through differential rates of 18% and 12.5% (both compounded annually) and (if) if done otherwise, AGR responsibility would increase significantly ”.

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<p>  Voda Idea, said the broker, also indicated that its" estimated AGR head (component) of Rs 11,100 crore is based on demand message (s) received (from the department of telecommunications), and "the last 2-3 years are the company's own estimates".
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<p>  The one-year-old telco – born through the merger of Vodafone India and Idea Cellular – booked a huge loss of SEK 50,921.9 in the July-September quarter, and has internally linked its additional AGR liability of SEK 44,200 to license fees , spectrum usage fee (SUC), interest and penalties that must be paid in less than three months.
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<p>  This is after the October 24 Supreme Court decision on adjusted gross income (AGR) kicked in.
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<p>  Credit Suisse said that if the telco's total AGR fees operate higher at "R200 5400 crore, according to DoT's internal estimates, a report would have to be made, the company would have to make additional provisions of Rs 10,100 crore".
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<p>  Analysts said that Vodafone Idea's significant AGR responsibilities contribute to its uncertain future and may require the company to go for another huge stock infusion to survive if significant relief does not come from the government.
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<p>  This is because telco can only access Rs 8,370 crore from Vodafone Group's co-parent against settlement of crystallized contingent liabilities before merging and thus must completely bend the balance of Rs 35,830 crore in its AGR fees.
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<p>  This, however, is easier said than done, analysts say, as the UK's Vodafone group has ruled out additional shareholding to Voda Idea, while the Aditya Birla group is also reportedly averse to any such infusion in its telecom joint venture, and can let it go insolvent if the government does not help.
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<p>  Voda Idea has said that its ability to continue as a "going concern" depends on getting relief – including a waiver for interest rates, penalties for AGR-related fees, lower taxes and fees and a moratorium on spectrum payments – from the government.
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<p>  Ravinder Takkar, the company's CEO, has said that providing relief is very much in the hands of the government as it has won the AGR case and can act in the interests of the telecommunications sector, the economy and consumers.<br />
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