Bharti Airtel has reportedly approached the Department of Telecommunications (DoT) to convert a portion of its statutory dues into equity, leveraging provisions from the government’s 2021 telecom reforms package. The move aims to ensure a level playing field in the sector following the government’s decision to convert Vodafone Idea’s dues into equity, which increased its stake in the telco to over 49%.
Airtel’s Proposal to DoT
According to a report citing sources, Airtel has formally submitted its request, though no official statement has been issued by the company. A government official told Moneycontrol that “all companies can apply under the reforms package,” and any such conversion will be assessed on a case-by-case basis.
If approved, the equity conversion could significantly ease Airtel’s financial burden and enhance flexibility amid intensifying competition and ongoing 5G investments.
AGR Dues and Sector Challenges
The telecom sector has been grappling with financial stress since Reliance Jio’s market entry in 2016 triggered a price war. The 2019 Supreme Court ruling on Adjusted Gross Revenue (AGR) further strained operators, confirming the government’s broader definition and resulting in cumulative dues of Rs 1.47 lakh crore. This includes Rs 92,642 crore in license fees and Rs 55,054 crore in spectrum usage charges (SUC), with the majority comprising interest and penalties.
Relief Package and Repayment Timeline
Under the September 2021 relief package, the government granted a four-year moratorium on AGR and spectrum dues. This ends in September 2025 for spectrum-related liabilities and by March–April 2026 for AGR dues. Post-moratorium, a staggered repayment schedule running until 2031 begins, with 10% due annually by March 31.
While Airtel had availed the moratorium, it had not previously opted for equity conversion—a step it now seems prepared to take, aligning more closely with Vodafone Idea’s financial restructuring approach.
