Adverse regulatory orders and intense competition have put the telecom sector under severe stress.pradeep gaur/mint
Adverse regulatory orders and intense competition have put the telecom sector under severe stress.pradeep gaur/mint

Airtel, Vodafone-Idea move SC, seek review of order to pay 92,000 crore to DoT

  • A three-judge bench headed by Justice Arun Mishra will decide if the review plea will be allowed
  • The matter pertained to the DoT’s claim that telecom companies had underreported their revenues, paying less levies to the government

NEW DELHI : Bharti Airtel, Vodafone Idea and two other companies on Friday filed a petition with the Supreme Court to review its 24 October judgement, ordering telecom companies to pay over 92,000 crore in dues and interest to the department of telecommunications (DoT) in a 14-year-long case.

The matter pertained to the DoT’s claim that telecom companies had underreported their revenues, paying less levies to the government.

The two other companies which have filed a review petition are Tata Teleservices and Hughes Communications India. Tata Teleservices is currently undergoing a merger with Bharti Airtel, a process DoT opposes.

“It’s not a complete review of the judgement—Bharti has asked for review of the penalty, interest and the amount of interest on penalty," an official said, requesting anonymity. A Bharti Airtel spokesperson refused to comment on the matter as it is subjudice.

Levies in the telecom sector are based on a percentage of the adjusted gross revenues (AGR) of companies. The DoT contended that the telcos’ AGR should also include income from dividends and revenue from sale of handsets bundled with services, a view the companies disputed.

The apex court has asked the companies to make the payments within three months of the judgement. The DoT, in a 13 November letter, directed operators to conduct a self-assessment of dues in the wake of the SC verdict.

Bharti Airtel Ltd’s dues are around 21,682 crore, while Vodafone Idea Ltd will have to cough up 28,309 crore. Reliance Jio Infocomm Ltd’s dues are just 13 crore.

A three-judge bench, headed by Justice Arun Mishra, will decide if the review plea will be allowed. The bench also comprised S.A. Nazeer and M.R. Shah.

The telecom sector has been reeling under stress due to intense competition and adverse regulatory orders. The SC verdict dealt a hammer blow to the likes of Vodafone and Airtel, forcing Nick Read, the chief executive officer of Vodafone Plc., the joint venture partner in Vodafone India, to say: “If you don’t get the remedies being suggested, the situation is critical." Bloomberg quoted him saying in London: “If you’re not a going concern, you’re moving into a liquidation scenario—can’t get any clearer than that."

The comments did not go down well with Indian authorities, forcing Read to eventually say that he had been misquoted. Read’s clarification notwithstanding, Vodafone has already written off the carrying value of its share in the loss-making Indian joint venture.

With fears of billions of rupees of new debt emerging in the troubled public sector banks, which are the major lenders to telecom companies, the government has now swung into action. The threat of the telecom sector becoming a monopoly or, at best, a duopoly, also hangs if the incumbent private operators are not offered a rescue plan.

In a relief to telecom companies, the Union Cabinet on 20 November approved a moratorium of two years for spectrum payments. Also, starting next month, all the operators, including Vodafone, Airtel, Jio and Bharat Sanchar Nigam Ltd, will raise the prices of their services.


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