Moratorium will help Vodafone Idea (Vi) survive and be competitive: MD

The four year moratorium on Adjusted Gross Revenue (AGR) and spectrum payments in expanding the  network and participating in 5G auctions, will make Vodafone Idea (Vi) survive and be competitive in the market, Vodafone Idea (Vi), Managing Director, Ravinder Takkar said, The Economic Times, reported on Thursday. This was his first media interaction after the government announced the relief package for the beleaguered telecom sector. He also said that all the concerns of potential investors have been taken care of by the government.

Pricing a key challenge for the industry

According to analysts, the four year moratorium will allow Vi to postpone a cumulative payment of almost Rs 1 lakh crore (Rs 24,000-Rs 25,000 crore annually). Other reforms include giving the option for  operators to pay the interest amount arising due to the said deferment of payment through way of equity.

The centre also has the option of converting operator’s dues due to the deferred payments into equity at the end of the moratorium period, for which the finance ministry will finalise the guidelines.

Further, the telco’s MD said that he won’t speculate on the cash flow relief that the company will get due to the moratorium, and is waiting for government’s calculation and guidelines.

Another important element in our industry is pricing which caused some of the challenges the industry has faced. But with the package and the messaging from the government to support the industry would create an environment that in some organic manner would help the prices start moving, he said.

Takkar also said that the telco won’t shy away in raising the tariffs upfront, as it is a key requirement for improving financials.