Bharti Airtel Accepts 4-Year Moratorium for AGR and Spectrum Dues

On Monday, Bharti Airtel joined Vodafone Idea in accepting the 4-year moratorium the government offered on statutory dues in the recent telecom relief package. However, the second-largest telco also accepted moratorium on AGR dues, something Vi hasn't done just yet.

Bharti Airtel Second Telco to Accept 4-Year Moratorium

The telco, under financial stress due to the fiercely competitive telecom market, and the mounting statutory dues, has finally pulled the trigger on the moratorium. When the government first announced the relief package, it was clear that the telco will accept the moratorium.

While the moratorium will come into play starting October 1st this year, Airtel hasn't said anything on the debt conversion. Apparently, the telcos have the option to either convert the interest on the payments to equity, or to convert the whole debt to equity. Of course, this would mean that the government will become a stakeholder; the choice opted will decide the government's say. Vodafone Idea, too, has held on this decision.

However, just like Vodafone Idea, Airtel has publicly expressed its interest in going for the debt-to-equity conversion. Both the telcos have till 29th of October to confirm the same to the DoT.

With spectrum and AGR moratoriums, Bharti Airtel will expect to see cash flow savings of Rs. 35,000-40,000 crore annually. In comparison, the same figure for Vi stood at Rs. 60,000 crore. Airtel will definitely take this chance to invest in its 4G network and the upcoming 5G rollout. Along with this, the returning BGs from the DoT will only add to the financial relief of the Sunil Mittal-led telco.

On the other hand, Reliance Jio has not reverted to the DoT regarding the moratorium; if its recent performance is anything to go by, it probably doesn't need it.