Four-year moratorium on AGR dues offers relief for telcos and banks. What should investors do?

Four-year moratorium on AGR dues offers relief for telcos and banks. What should investors do?

The four-year moratorium on payment of adjusted gross revenue dues as part of the government’s measures to address the liquidity requirements of telecom companies offers big savings in terms of cashflow for Vodafone Idea and Bharti Airtel, experts said. The Union Cabinet approved the moratorium and other measures along with structural and procedural reforms for the struggling telecom sector on September 15. The steps taken include rationalisation of interest rates on delayed payment of licence fees and spectrum usage fees and the scrapping of penalties and interest on penalties. Additionally, non-telecom revenue will be excluded while calculating AGR, offering major financial relief to telcos. “Overall, it is very positive news for the telecom sector. Both Vodafone Idea and Bharti Airtel will benefit because they owe the government the most,” said …
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