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Business News/ Industry / Telecom/  SC admits telcos’ modification plea on AGR verdict
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SC admits telcos’ modification plea on AGR verdict

Top court likely to hear matter next week, beyond the 23 January deadline given to telecom operators
  • Telecom firms want to negotiate a sustainable payment schedule with the telecom department
  • The Cellular Operators Association of India had earlier sought a 14-year period to pay off these dues. (Photo: ANI)Premium
    The Cellular Operators Association of India had earlier sought a 14-year period to pay off these dues. (Photo: ANI)

    NEW DELHI : Tuesday brought a flicker of hope for India’s embattled telcos with the Supreme Court agreeing to hear their petitions to modify its 24 October order that made them liable to pay up more than 1 trillion of adjusted gross revenue (AGR) dues by 23 January.

    The matter was mentioned before a bench headed by Chief Justice S.A. Bobde on Tuesday and the case is likely to be heard next week. The telcos had filed the modification pleas on Monday.

    The court, however, did not comment on the status of the original payment deadline.

    “Vodafone Idea Ltd will not make the payment by 23 January," said a person aware of the development, requesting anonymity.

    Bharti Airtel Ltd raised $3 billion earlier this month to pay the dues.

    The pleas filed by Vodafone Idea, Bharti Airtel, and Tata Teleservices seek more time to pay adjusted gross revenue (AGR) related dues. The telcos want to negotiate a sustainable payment schedule with the department of telecommunications (DoT), which has issued demand notices for revenue share, interest, and penalty.

    Bharti Airtel owes 35,586 crore, Vodafone Idea 50,000 crore, and Tata Teleservices, which has sold its mobile services business to Airtel, 14,000 crore.

    Bharti Airtel’s petition said it would need more time to calculate dues across 22 telecom circles over the last 15 years, which is a complex process. Vodafone Idea, meanwhile, said it does not have the resources to pay such huge amounts. As such, if suitable payment terms are not made available, it will lead to the immediate closure of one of the largest and oldest telecom companies in India, causing disruption to 300 million subscribers and putting lakhs of jobs at risk, its petition said. Mint has seen copies of both petitions.

    The Cellular Operators Association of India, which represents Bharti Airtel, Vodafone Idea and Reliance Jio, hailed the court’s admission of the modification pleas as a positive move for the sector.

    “Telcos have indicated their willingness to pay AGR dues. We are now asking for appropriate terms to make this payment. We have sought a debt package from DoT to make payments affordable. We want an adequate moratorium and a 15-year period to pay the entire AGR dues (principal and interest and penalty)," said Rajan Mathews, director general, COAI.

    Emails sent to Bharti Airtel, Vodafone Idea, and Tata Teleservices were not answered till press time.

    The court’s earlier verdict brought an end to the prolonged dispute between the government and telecom companies on the definition of AGR.

    Under India’s telecom licence rules, operators must pay licence fees and spectrum charges at 8% and 3-5% of AGR respectively. While the telcos said AGR refers only to revenues from telecom, DoT insisted that it includes all revenues. The Supreme Court upheld the government’s definition, in major blow to telcos bleeding from intense competition in the last few years.

    The modification applications were filed after the apex court last week dismissed pleas of the operators to review its earlier judgement. The apex court’s refusal to review its order has dealt a body blow to Vodafone Idea and Bharti Airtel, which reported record losses in the September quarter as they set aside funds to pay dues. The two telcos had on Thursday also said they were evaluating the possibility of filing of curative petitions.

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    Published: 21 Jan 2020, 11:30 AM IST
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