Experts believe that Bharti Airtel is at comparatively better spot to offer guarantees for securing staggered payments, than Vodafone Idea is, if the Supreme Court allows telecom industry to pay their adjusted gross revenue (AGR) in a staggered manner in a report.

The Supreme Court on Thursday asked telecom companies to file affidavits within a period of five days outlining the roadmap to clear the remaining statutory dues that arose from the court verdict of including non-telecom revenues for calculating dues to the government.

A bench comprising Justices Arun Mishra, S. Abdul Nazeer and M. R. Shah on Thursday had said, “Firstly, the reasonable time-frame, secondly, how to ensure the payment of the amount even within that time-frame and what kind of securities, undertakings and guarantees should be furnished to ensure that the amount is paid by the telecom service providers.”

Axis Capital

“While reiterating that AGR dues have to be paid, the apex court indicated that staggered payment will be allowed only if guarantees for payments are given. We see Bharti Airtel better placed to furnish guarantee,” Axis Capital said in a note citing the company’s fund raising drive, assets available for monetisation and AGR payments already cleared.

It further added that Vodafone Idea (VIL) may also manage to furnish guarantee, given large assets available with Aditya Birla Group, but then it’s balance sheet would be tight.

Axis Capital added there is strong possibility of Vodafone Idea to stay as a going concern if petition for staggered payment of Adjusted Gross revenue (AGR) dues is accepted and government/company take steps to ensure its viability.

CLSA Limited

Stating out the facts and figures, another capital markets and investment group CLSA Ltd. said Bharti Airtel’s AGR risk is lower as it has already paid about Rs 18,000 crore (including adhoc payment) after fundraising, and it awaits final DoT demands. For Vodafone Idea, it said, if the top court allows AGR relief in staggered payments and lower DoT final demand, the troubled telco is likely to reconsider its insolvency plans.

Edelweiss Financial Services Ltd.

Investment and financial services company, Edelweiss Financial Services Ltd. said it believed deferred payment over 15 20 years is critical to sustaining a three-private-player market.

“We believe telco promoters are unlikely to hand out personal guarantees; instead, accepting terms such as licence cancellation, no dividend/buyback till repayment, etc look more feasible,” Edelweiss said in its report.

Stating that it remains positive on Bharti Airtel on considerations of strong network and balance sheet, it added overall given the higher liability for telecom companies and their keener focus on debt reduction, pricing discipline is expected to be maintained.

Credit Suisse

Credit Suisse said that long-term viability of Vodafone Idea “continues to remain under a cloud”, and maintained preference for Bharti Airtel, which is said is well-positioned to benefit from the improving sector dynamics led by improvement in mobile pricing.

While VIL can manage its cash flow needs till FY22 mainly on account of a two year moratorium on deferred spectrum debt, the company could find it “challenging” to service the AGR dues in case the tenure for staggered payment is short, say less than 10 years, the Credit Suisse note said.