The AGR dues issue is not going away soon. But its not just telecom companies, non-telecom players are really worried too. Non-telecom public sector units GAIL India, Power Grid Corporation (PGCIL), Oil India (OIL) and two others are filing separate applications in the Supreme Court to clarify if the SC October 24 order on payment of licence fee dues applies to them, reports Economic Times.
OIL pointed out that it earned Rs 1.47 crore from leasing spare capacity, but the Department of Telecommunications (DoT) has demanded Rs 48,000 crore licence fee based on its entire revenue, including sale of oil and gas.
GAIL, along with OIL, faces the largest demand for dues from DoT.
These companies feel they should never have been part of this case at all in the first place. Secondly, their revenues from their regular businesses are disproportionately higher than what they received as income from the telecom business they operated after having obtained the licences.
Now that has come to haunt them since the dues, based on the adjusted gross revenue (AGR), work out to over Rs 3 lakh crore for these companies while the mainline telecom companies will end up settling only around half that amount.
There is yet another angle to the story. Most of these companies do not have the ware withal to settle the dues if the apex court does not relent. Rating agency Moodyâ€™s has brought out the risks these companies face if they are forced to comply with the demand made. Taking the OIL example again, the demand on it from the DoT is eight times the profit before tax achieved by the company. Where will it generate the cash to pay such enormous dues?
Since the companies are also state-owned, they have reportedly approached the Solicitor General to guide them on the next course of action in the case.