Vodafone Idea Approves 4-Year Moratorium On Spectrum Payment, Company's Shares Rise

Vodafone Idea (Vi) has accepted a four-year moratorium on payment of spectrum. It is the first telecom company to accept the moratorium on payment under the telecom relief package provided by the central government. The central government had announced a relief package for telecom companies last month. This included a four-year moratorium on payment of AGR and spectrum and an option to convert the outstanding amount into government equity. Due to this decision of Vi, the company's stock also saw a rise on Wednesday.

With this package, the liquidity problem for Vi has been eased somewhat. If it opts for the moratorium on both AGR and spectrum dues, it could result in annual savings of around Rs 25,000 crore. Vi has asked the Department of Telecom (DoT) when it will get back its bank guarantee related to the payment of spectrum. According to the report, the company said that it will confirm the decision at a later date, whether it is opting for a moratorium on Adjusted Gross Revenue (AGR) payment and converting interest on deferred payment to equity. No.