| Even as Vodafone Idea has a board meeting on Wednesday to finalise plans to raise Rs 25,000 crore of capital, the government is likely to turn down a request by the Cellular Operators Association of India — RJio does not support the proposal though it is a COAI member — to give telcos a two-year moratorium on their deferred-payment obligations for spectrum bought in the past. COAI’s letter is the fourth written since the end of November last year. Government sources said apart from the fact that there is no industry consensus on the moratorium, the government had already given the industry concessions by raising the repayment period to 16 years from the earlier 10 and with elections around the corner the Opposition would position the relief as crony capitalism. While Bharti Airtel has to pay Rs 5,573 crore of deferred payments every year (using the 16-year period) from 2019 to 2031 — this is for spectrum bid for so far — Vodafone Idea has to pay Rs 10,579 crore, RJio Rs 2,969 crore and RCom Rs 439 crore. A combination of rising payout to the government and falling telecom revenues as a result of the RJio competition, the share of telco revenues going to the government rose from 29% in FY08 to 60% in FY18. COAI’s letter to telecom secretary Aruna Sundararajan draws attention to the 42.5% fall in adjusted gross revenues (AGR) between Q1FY17 and Q2FY19 — this will make the ratio of revenues going to the government rise even more — from `44,754 crore to `25,728 crore. While COAI’s numbers apply only to revenues from ‘access’ services, even the Trai’s data — for all revenues — shows a 33% fall in AGR, from `53,383 crore to `36,142 crore in the same period. According to COAI, as a result of the increased competition, the industry’s ROCE is now below 20% and, “for the first time in the financial year 2017-18 and H1FY19 plunged into loss at PBT (profit before tax) and is delivering a negative ROCE”. If Vodafone Idea does not get a moratorium on the deferred payments, it may have to revisit its capital raising plans since around 40% of the `25,000 crore that is to be raised will be used up for just this in 2019; a stock exchange notice from the firm said the fundraising will be complete by March 2019. The company’s annual capex guideline is `27,000 crore for FY19 and FY20 — this is to raise its 4G coverage by 80% and capacity 2.5 times — or an amount that is quite similar to Bharti Airtel’s. Vodafone Idea’s July-September losses were `4,974 crore versus RJio’s net profit of `831 crore in the October-December quarter. Vodafone Idea’s net debt is `1.13 lakh crore. | 
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