AGR verdict: Data could be the new Onion, Mr Ravi Shankar Prasad

The need of the hour could be to let Vodafone-Idea continue with the business providing them an extended rope to make the payments over a period of time, than to kill the "goose".

The Hon. Supreme Court on Friday rapped the telecom operators and ordered them to pay the adjusted gross revenue (AGR) dues by the stroke of midnight on Friday. This is akin to a “Death Warrant” for Vodafone-Idea. The legal system has to follow the rule book and is bound by law. However, it’s the executive which has to “think on its feet” and figure out the best solution for this situation from a holistic viewpoint, vis-à-vis nailing a “culprit”.

All eyes would be on the Telecom Minister, Mr. Ravi Shankar Prasad, who will need to think “out-of-the-box” than take the easy path of toeing the Hon. Court’s directive. Before shutting Vodafone-Idea, the Telecom Minister should figure out how to recover AGR dues from the corpses of telecom sector, viz. Reliance Communication (RCom), Aircel, Telenor, Sistema and Videocon. Not everybody comes with a rich pedigree like the Tatas, who are paying-off dues of Tata Teleservices through the parent Tata Sons.

Now, here is what would happen if Vodafone-Idea were to shut shop:

- Non-recovery of dues: It will defeat the very purpose of AGR, turning this imbroglio into a long-drawn process without any clarity on closure.

-Job losses: About 14,000 employees, along with numerous others who are directly dependent on Vodafone-Idea as casual workers, dealers, service providers etc. will suffer.

- Non-performing assets (NPAs): Nearly Rs 1.15 trillion could turn NPA. This could be another IL&FS-type event. Unlike other NPAs, the so called “assets” of a telecom company can disappear in thin air the day it shuts down. Additionally, who would shoulder the responsibility paying-off home loans, personal loans etc of the employees?

- Telecom tariffs: Most telecom players have already increased tariffs by about 40 per cent recently and should double to about Rs 300, as per CEO of Airtel, Gopal Vittal, for the sector to remain sustainable. However, in the event of demise of Vodafone-Idea, the tariffs can shoot up further within a short span.

- Porting: Some 30 crore Vodafone-Idea customers will need to the ported out of the network, leading to possible disruption of services and inconvenience. Porting customers are normally given a red carpet welcome, but the Vodafone-Idea customers may be treated as refugees.

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.