Photo: Mint
Photo: Mint

DoT tells telecom operators to start self-assessment of dues

  • On 24 October, SC directed telcos to pay at least 92,000 crore in past dues to the govt within three months
  • DoT’s letter comes about three weeks after SC rejected the definition of AGR proposed by telcos

The department of telecommunications has asked operators to conduct a self-assessment of dues after last month’s Supreme Court verdict upheld the government’s definition of adjusted gross revenue.

“It is the responsibility of licencees to pay licence fees and other dues after carrying out their own assessment as prescribed in the licence agreement. You are therefore directed to make the payment in accordance with the order of Supreme Court and submit requisite documents to ensure compliance within stipulated timeframe," DoT said in a 13 November letter to operators, a copy of which was reviewed by Mint. Self-assessment of dues will minimize the risk of mismatch in calculations. On 24 October, the court directed operators to pay at least 92,000 crore in past dues to the government within three months.

The latest demand may spell more trouble for the telecom operators, which are struggling under a mountain of debt, declining revenues and widening losses. Further pressure on telcos to pay the dues may also hurt the investment climate in the country, and the forthcoming roll-out of 5G services.

Bharti Airtel Ltd’s dues are roughly 21,682 crore, while Vodafone Idea Ltd will need to cough up at least 28,309 crore. In contrast, Reliance Jio Infocomm Ltd’s dues are just 13 crore.

DoT’s letter comes about three weeks after the top court rejected the definition of adjusted gross revenue (AGR) proposed by the telecom operators that excluded revenue from non-core telecom operations such as rent, dividend and interest income, marking the end of a 14-year-long legal battle.

The tussle started when telecom operators migrated to a new revenue-sharing system offered by the government in 1999 under which they agreed to share a certain percentage of revenue with the government.

Operators had argued that AGR should comprise revenue from telecom services, but DoT insisted that it should include all revenue generated by an operator. Currently, telcos pay 3-6% and 8% of their AGR as spectrum usage charges and licence fee (including USOF), respectively.

Meanwhile, a committee of secretaries under the cabinet secretary is considering demands of telcos for relief and will suggest ways to alleviate their financial stress and create a favourable investment environment.

The government panel will also look into the demand of telcos for deferment of spectrum auction payment dues for 2020-21 and 2021-22 in order to ease cash flow as well as measures such as reducing levies, including spectrum usage charges and the USOF fee.

Lobby group Cellular Operators Association of India has sought an easier payment schedule for spectrum bought in previous auctions, the waiving of penalty and interest arising out of AGR dues, and a 14-year period to pay the principal amount of AGR dues.

Close