AGR case: SC orders telcos to file balance sheets of past 10 years

In its affidavit, Bharti Airtel on Thursday told the court it had paid a substantial part of its AGR dues, seeking 20 years to pay the rest.

The Supreme Court has opened a new front, asking Bharti Airtel and Vodafone Idea to submit their financial statements for the past 10 years in the long-winded adjusted gross revenue (AGR) case as the two telcos listed reasons for not furnishing bank guarantees and sought a 20-year term to pay their dues. The top court will next hear the case in the third week of July.

In its affidavit, Bharti Airtel on Thursday told the court it had paid a substantial part of its AGR dues, seeking 20 years to pay the rest. Explaining why furnishing a fresh bank guarantee was not necessary, the Sunil Mittal-led telco told the court Airtel was no fly-by-night operator. Financially stressed Vodafone Idea’s counsel said if it was forced to give a bank guarantee, the company would go down, hitting hundreds of jobs. The Department of Telecommunications (DoT) has sought time from the court to assess the affidavits of the telcos.

Responding to the court’s recent observation that there was no merit in the government asking public sector units to pay Rs 4-trillion AGR dues, The DoT has withdrawn the bulk of its demand. The DoT told the SC on Thursday that it had decided to withdraw 96 per cent of the Rs 4-trillion demand against non-telecom PSUs such as GAIL and Power Grid Corp. In effect, AGR dues worth Rs 3.7 billion have been taken off.

Solicitor General Tushar Mehta, representing the DoT, informed a three-judge bench headed by Justice Arun Mishra that the demand against non-telecom PSUs had been withdrawn.

DCC may discuss telcos' AGR issue on Friday; COAI presses for relief

The industry has made a string of demands including a moratorium, staggered mode of payment, lower licence fee and setting up of a tariff floor.

The Digital Communications Commission, the apex decision-making body in the telecom sector, is expected to meet on Friday to deliberate on a relief package for the financially stressed industry.

As directed by the Supreme Court, telecom companies need to pay Rs 1.47 trillion to the government towards licence fee and spectrum charge dues linked to adjusted gross revenue (AGR).

Of this, Bharti Airtel needs to pay Rs 35,500 crore and Vodafone Idea more than Rs 50,000 crore—they have paid just a fraction of the total till now.

The industry has made a string of demands including a moratorium, staggered mode of payment, lower licence fee and setting up of a tariff floor.

Sources said that any relief for the sector would come with riders.

“They (companies) cannot manipulate us, they have to make further payments before even seeking relief,” a Department of Telecommunications (DoT) official said.

The DCC, formerly known as the Telecom Commission, comprises officials from the departments of telecommunications, electronics and information technology, revenue, and think tank NITI Aayog.

The DoT is expected to make a presentation to the commission regarding the possible relief scenarios.

Cellular Operators’ Association of India, a body representing the telecom industry, on Thursday urged the Union government to step in so that the telecom sector can be brought back on track.

COAI, in a letter to Telecom Secretary Anshu Prakash, asked for easier terms for payment of statutory dues by telcos, including extension of loans at lower interest rates to cover the AGR liabilities, as also fast implementation of floor prices, to rescue the troubled sector.

AGR dues: Telecom firms, DoT discuss part upfront payment by March 31

The move suggested by telcos, if executed, will bring in additional revenues of Rs 22,077 crore from Bharti Airtel, Vodafone Idea, and the Tatas in this fiscal year.

BS : Leading telcos are discussing a proposal with the Department of Telecommunications (DoT) regarding paying part of their AGR dues upfront by March 31 if the Supreme Court gives a favourable verdict on their “modification petition”, which will be heard this week.

The companies have offered to pay upfront the principal amount due for licence fees and spectrum usage charges (SUCs) on the basis of adjusted gross revenue (AGR). This amount will not include the interest, the penalty, and the interest on the penalty. The proposed upfront amount will be the difference between the AGR calculations done by the DoT and what the telcos have paid as licence fees and SUCs over the years based on their interpretation of AGR. The Supreme Court had in October upheld the DoT definition of AGR, which resulted in a Rs 1.47 trillion additional payout bill for the telcos.

The move suggested by telcos, if executed, will bring in additional revenues of Rs 22,077 crore from Bharti Airtel, Vodafone Idea, and the Tatas in this fiscal year.

This is in addition to the budgeted target of Rs 50,519 crore as telecom revenues in 2019-20.

If all other telcos (including those that have stopped operations) were to make the upfront payment, the government will get around Rs 34,773 crore (excluding those of Reliance Jio, which has paid Rs 195 crore). These include Rs 23,182 crore as licence fees and Rs 11,591 crore as SUC. The three telcos, through the new petition, have requested the court to give them permission to discuss with the DoT the terms and timing of the payment of the remaining dues. The upfront amount represents around 25 per cent of their dues and is in many ways in line with what the telcos paid as deferred spectrum. In deferred spectrum, the upfront payment varied from 25 per cent to 30 per cent, depending on the band in which they bought spectrum, with the rest payable in 16 years with a two-year moratorium.

If the same formula is implemented (where a two-year moratorium is given just after the upfront payment), telcos will not have to pay both for deferred spectrum (the government has allowed a moratorium recently), totalling more than Rs 50,000 crore for the next two years, and will have no payout on AGR either. This will give a cushion for many players like Vodafone Idea to tide over their financial problems.

AGR dues: DoT talks tough on deadline, telecom companies sit on the fence

Telcos discuss giving January 24 deadline a miss.

BS : The Department of Telecommunications (DoT) will begin issuing notices to telecom companies after the January 24 deadline for payment of AGR (adjusted gross revenue) dues, set by the Supreme Court, lapses, a senior official said.

This comes even as the apex court on Tuesday agreed to list the “modification petition” filed by Bharti Airtel, Vodafone Idea and Tata Group for “sometime next week”. The firms have sought a change to the 90-day deadline for payment of Rs 1.47 trillion worth of AGR dues, and permission to engage with the DoT on the terms and timing of payment.

It is learnt that the DoT will issue notices in compliance with the apex court’s October 24, 2019, order that stated that the AGR-related dues need to be paid by January 24.

“We cannot go against the SC. Therefore, we have to recover dues from the companies according to their order,” an official said. He added that if the companies get any relief from SC next week, their payments will be adjusted for any future settlement.

Meanwhile, leading telecom companies are holding hectic parleys as they consider skipping the deadline for payment of AGR dues.

Rajan S Mathew, director general of Cellular Operators Association of India (COAI), said: “I understand that most of the telcos may wait till the hearing of the new petition before they make the payment.”

Mathew said there were enough judicial precedents, where the court had not executed its order, pending further adjudication in the same court. He said that they will continue to hold talks with DoT and are hopeful that no coercive action will be taken, though there has been no official communication to that effect.

This view was echoed by the lawyer Shally Bhasin, who represented Vodafone Idea. Bhasin told TV channels that no one was going to pay the AGR dues and that telcos have requested the court to let them discuss the matter with DoT and finalise the payment plan.

However, Bharti Airtel declined to comment on the issue, and it is not clear whether it will pay some money upfront or follow the same line as Vodafone Idea.

In the case of Jio, which was not part of the review petitions, it is expected to pay by the deadline. Jio declared in its recent financial results that it has estimated the liability for the period from 2010-11 to 2018-19 at Rs 177 crore for licence fee and spectrum user charges (SUC), in view of the SC judgment.