AGR Verdict - Impact on telecom sector - Mr. Keshav Lahoti, Associate Equity Analyst, Angel Broking Ltd

"The Supreme Court on AGR verdict allowed telecom operators 10 years timeline to pay the dues. The court said that 10% of the total payout has to be paid by March 31, 2021. The 10 year timeline will begin from April 1, 2021. Annual instalments have to be paid by February 7 every year. Telecom operators have asked for a 15 years timeline and the Government have suggested a 20 years timeline to clear AGR dues. The court also mentioned that no dispute can be raised on this matter and neither it will allow any revaluation.

We believe Bharti Airtel will comfortably pay its AGR dues over 10 years. It will not be easy for Vodafone Idea to pay dues over 10 years, provided no hike in ARPU is taken from current levels. Reliance Jio has already cleared its AGR dues. The Supreme Court has asked NCLT to decide whether spectrum held by these telcos can be sold under IBC is also seen as positive for Bharti Airtel regarding payment of AGR dues of Aircel and Videocon and also for Reliance Jio for payment of RCom AGR dues."

Source : Equity Bulls

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