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The Union Cabinet is likely to discuss the much-awaited relief package for the financially stressed telecom sector on Wednesday.

The relief package could include relaxation on payment of pending dues to the government and a one-year moratorium on spectrum instalment due in April 2022. There is a possibility that some additional measures will also be announced as part of the telecom sector relief package.

The Centre has been holding discussions with the telecom companies before it announces a package to support the stressed sector.

Experts tracking the sector said the relief measures need to be announced quickly in order to save debt-laden telco Vodafone Idea Limited (VI).

While Bharti Airtel and VI both have to clear a large amount towards pending AGR-related dues, the latter is in a precarious position as it does not have the financial capacity to honour future repayments.

Financial services provider BNP Paribas recently said that a combination of reduced interest on deferred spectrum liability and an interest wavier on AGR-related dues will provide nearly $1billion relief to Vodafone Idea and boost its chances of survival.

BNP Paribas senior telecom analyst Kunal Vora said, “A 2 per cent rate cut on VIL’s deferred spectrum liability would lower its annual interest burden by Rs 2,100 crore and if the government foregoes the interest component on the telco’s AGR dues, it can result in an additional Rs 4,000-Rs 5,000 crore annual relief.”

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