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Shares of Vodafone Idea were up 4 per cent while Bharti Airtel hit record highs during the morning trade on Wednesday as the Union Cabinet is expected to take up the Department of Telecommunications’ (DoT’s) proposal for offering a relief package to the telecom industry, at its meeting later in the day.
At 9:56 am, Vodafone Idea shares were trading at ₹8.67 on the BSE, up ₹0.39 or 4.71 per cent. It had opened at ₹8.75 as against the previous close of ₹8.28. The shares hit an intraday high of ₹8.90 and a low of ₹8.60.
On the NSE, it was trading at ₹8.65, up ₹0.40 or 4.85 per cent.
Bharti Airtel was trading at ₹679.30 on the BSE, up ₹8.60 or 1.28 per cent. It hit a fresh 52-week high of ₹684 and an intraday low of ₹675. The shares opened at ₹679.70 as against the previous close of ₹670.70.
On the NSE, it was trading at ₹678.15, up ₹7.60 or 1.13 per cent.
Expected relief package
In a major relief package for the stressed telecom sector, the Cabinet is likely to consider rationalisation of the telecom licence fee from 8 per cent to 6 per cent today, according to reports.
It may also change the definition of the average gross revenue (AGR) that the industry has been demanding for long, in order to avoid paying more interest, as per reports.
Vodafone Idea, in particular, has been under significant financial duress, unable to pay the mounting spectrum dues, adjusted gross revenue payments, and invest enough capex into the upcoming 5G roll-out as well as expansion of the 4G network.
According to experts, the company is in dire need of government support, with mounting dues of ₹1.9 lakh crore, of which ₹1 lakh crore is for deferred spectrum payments and ₹62,000 crore for AGR liability to the government.
VIL is hopeful towards this. The firm’s Chairman, Himanshu Kapania earlier had told shareholders that Vodafone Idea remains confident that the government recognises the need for healthy competition in the telecom sector.
Airtel has AGR dues of ₹43,000 crore, of which it has already paid ₹18,004 crore by March 31.
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