Both telecom operators have approached the Supreme Court to renegotiate their payment terms, which the court has agreed to hear next week.

Airtel Vodafone Idea not to pay AGR dues to DoT on Jan 23 to wait for SC hearing
Money Telecom Crisis Thursday, January 23, 2020 - 13:51

Both Bharti Airtel and Vodafone Idea, which have a lion’s share of the Rs 92,000 crore dues after the Adjusted Gross Revenue judgment was announced, have said that they will not be clearing their dues on Thursday, which was the original deadline given in the order on October 24, 2019. They have both approached the Supreme Court to renegotiate their payment terms, which the court has agreed to hear next week. 

Bharti Airtel told the Department of Telecom on Thursday that it will not clear any AGR arrears until the Supreme Court hearing next week. A source told IANS that it will wait till the next hearing of the Supreme Court on its modification petition.

Vodafone Idea had informed the DoT the same thing.

“We have received a communication from Vodafone Idea which says the company is waiting for the Supreme Court decision on its plea (for) allowing it to negotiate with the DoT terms and timeline for payment of AGR dues before it takes any further steps on the matter,” a government official the Times of India. 

On Tuesday, Airtel, Vodafone Idea and Tata Teleservices filed a modification plea with the Supreme Court to allow the telcos to negotiate with the DoT on conditions and payment schedules of the statutory dues. Collectively, Vodafone Idea, Bharti Telecom and Tata Teleservices have to pay a total Rs 1.02 lakh crore in AGR-related dues.

However, the industry is currently in a precarious position, as Vodafone Idea could go under if it is made to pay the dues apparently, reducing the telecom market to a duopoly. 

Telecom analysts and the Cellular Operators Authority of India have been pressing for a reduction in licence fees (LF) and spectrum usage charges (SUC). 

There could be progress on this front according to the Wire, which reported that the Centre is mulling setting up a Special Purpose Vehicle (SPV) to give relief to the sector. 

An SPV is a legal entity formed for a specific purpose where all the people investing would be pooled together, reducing risk. According to the Wire report, the government won’t collect both the LF and the SUC over the next 15 years — and the figures will instead go into this SPV in exchange for equity.

The issue

The apex court had on October 24 last year upheld the AGR definition formulated by the DoT and termed as "frivolous" the nature of objections raised by telecom service providers.

The problem originated when telecom operators migrated to a new system offered by the government in 1999, under which they agreed to share a certain percentage of revenue with the government. Operators argued that AGR should comprise only revenue from telecom services, but the DoT insisted that it should include all revenue earned by an operator. It is because of this that Rs 92,000 crore is owed in dues to the government. 

On January 16, a bench headed by Justice Arun Mishra had dismissed review petitions of telecom firms seeking review of its earlier order asking them to pay Rs 1.47 lakh crore in statutory dues by January 23, saying it did not find any "justifiable reason" to entertain them.

In an affidavit filed earlier in the top court, the DoT said Airtel owed Rs 21,682.13 crore as licence fee to the government and dues from Vodafone totalled Rs 19,823.71 crore, while Reliance Communications owed Rs 16,456.47 crore. BSNL owed Rs 2,098.72 crore, and MTNL Rs 2,537.48 crore.

Holding that interest and penalty have rightly been levied on telecom companies, the apex court said there would be no further litigation on the issue, and it would fix a time-frame for calculation and payment of dues by telecom firms.

Last week, the court had rejected a review petition filed by the telcos on the October verdict, which widened the definition of AGR. The telecom sector companies owe the government about Rs 1.47 lakh crore.

The telcos said they wanted an open court hearing on their fresh pleas with regard to working out a fresh schedule of payment of their dues. This will be heard next week

With inputs from agencies

Read: Telcos expected to pay up Rs 92,000 cr in AGR dues: Will mobile bills increase?

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