Cash-strapped Vodafone Idea Ltd (VIL) has approached the government to seek a one-year moratorium on the payment of spectrum instalment of over Rs 8,200 crore, due in April 2022.

VIL, in a letter to the telecom secretary on June 25, has said it will be “unable to pay the instalment of Rs 8,292 crore due on April 9”, because of “cash being used for payment of AGR (adjusted gross revenue) dues and the inability of the operations to generate the required cash in a predatory pricing situation”.

According to the letter, the company has requested the department of telecom to grant it another year of moratorium to pay this instalment in April 2023 instead of April 2022 and has made it clear that “it is almost inevitable” that the firm will not be able to pay the said amount in April 2022.

VIL has also said that while it is working on raising new funds for the last six months, “investors are not willing to invest in the company because they believe that unless there is a significant improvement in consumer tariffs, the health of the industry will not recover and they will incur a loss on their investment”.

In its communication to the DoT, VIL said after

the grant of a two-year moratorium earlier, the AGR judgment was pronounced, which has taken away Rs 7,854-crore cash as upfront payment. Based on the current demands of the DoT, it will also have to pay AGR instalments of about Rs 9,000 crore in March 2022.

Meanwhile, Bharti Airtel chairman Sunil Mittal on Thursday said the telecom industry was under tremendous stress. “I hope the government, the authorities and the telecom department focus on this issue and ensure India’s digital dream remains intact through the provision of at least three operators, ” he said.

Airtel would “not hesitate” to raise tariffs but it cannot be done “unilaterally”, Mittal added.

Bengal spectrum

Bharti Airtel on Thursday said it has deployed additional 21.6MHz spectrum in the Bengal circle secured in the last round of auction to beef up its network to 65MHz in the circle. The telecom major had paid Rs 783.6 crore for spectrum in the Bengal circle.

“With the largest spectrum bank of 65MHz in Bengal, Airtel is well positioned to meet the surging demand for high-speed data,” said Siddharth Sharma, CEO — Bengal and Odisha, Bharti Airtel.