Immediate payment of dues may cripple 5G bids by telcos: US Rating agency Fitch

NEW DELHI: Any immediate payment of dues by telcos following the Supreme Court order on adjusted gross revenue (AGR) would leave them with limited financial flexibility to bid for 5G spectrum thus delaying its auction, Fitch Ratings has said.

“The Supreme Court’s acceptance of the DoT’s definition of AGR is a setback to the telecom industry. The quantum and timing of cash outflow is uncertain as over 60 per cent of outstanding dues include taxes and penalties. If Vodafone Idea were to pay $4 billion immediately, it would cause a severe stress on their balance sheet. Also an immediate payment of such dues could delay the 5G spectrum auction as incumbents would have limited financial flexibilities to bid for 5G spectrum auctions,” Nitin Soni, Director – Corporates, Fitch Ratings told IANS.