DoT orders telecom firms to clear AGR dues without delay
NEWDELHI: The department of telecommunications (DoT) on Wednesday ordered Vodafone Idea Ltd, Bharti Airtel Ltd and other telecom operators to immediately clear all dues to the government arising from the Supreme Court’s October order.
“You are directed to provide the details of the payment made as required by above mentioned DoT letter dated 20.01.2020, and also pay balance amount without any further delay,” DoT said in a letter to telcos, a copy of which was reviewed by Mint. The March 3 letter does not specify how much more operators need to pay.
The latest DoT diktat comes even as the government discusses measures to alleviate the stress in the industry following a court order directing telecom companies to pay licence fee and spectrum usage dues totalling ₹1.4 lakh crore.
Airtel has so far paid ₹18,004 crore to DoT, while Vodafone has deposited ₹3,500 crore. Airtel claimed it has cleared all its dues to DoT and has the supporting documents to prove it, although the department pegs its total dues from the company at ₹35,586 crore.
But the latest DoT letter is likely to put Vodafone Idea in a difficult situation as the company has only been able to clear a fraction of its dues and lacks the ability to immediately clear all its dues. Vodafone Idea, which owes DoT an estimated ₹50,000 crore in dues, is banking on the government to offer some relief in terms of easier payment terms and waiver of interest and penalty on the dues.
Vodafone Group Plc chief executive officer Nick Read plans to visit India on March 6 and has requested a meeting with telecom minister Ravi Shankar Prasad to discuss the crisis, Mint reported on March 3.
Vodafone Idea, formed by merging Vodafone India with Idea Cellular of Aditya Birla Group, has been on the brink of collapse following the unfavourable court verdict. Controlling shareholders Vodafone Group and Aditya Birla Group, have ruled out further equity infusions into the struggling telecom operator.
In its judgement, the Supreme Court upheld the government’s definition of adjusted gross revenue (AGR), on which it calculates levies on telcos. The order dealt a blow to the telecom industry, which argued that AGR should only include revenue from core telecom operations and not rental or dividend income. Telcos now have to pay dues for the past 14 years, along with interest and fines. The latest DoT letter indicates lack of coordination among the various arms of the government. Top officials in the finance ministry and the Prime Minister’s Office have been brainstorming on steps to pull the industry out of its morass.
“Several proposals are being discussed to provide the sector with immediate relief from the AGR dues,” a person aware of the matter said, requesting anonymity. “One of them involves setting up a fund, which will lend money to telcos at a concessional rate to repay their dues.” The government or an entity owned by it could provide the seed capital to get the fund going, the person added.