Divulge AGR dues formula, Airtel, Vodafone Idea told
NEW DELHI: Bharti Airtel and Vodafone Idea Ltd, whose selfassessed dues to the government are less than half of what the Department of Telecommunications (DOT) estimates, must disclose workings highlighting areas of difference as minority shareholders deserve to know, an analyst report said.
While Bharti Airtel has pegged its dues arising from a Supreme Court ruling that asked for non-telecom revenues to be included in calculating spectrum charges and licence fee at ₹13,004 crore, the DOT puts the estimate at ₹35,000 crore.
In case of Vodafone Idea Ltd (VIL), the DOT is seeking over ₹53,000 crore, while the company estimates its dues are ₹21,533 crore.
“While we appreciate the matter is still sub judice, once the legal chapter is over, Bharti and VIL could (and should) disclose their self-assessment workings highlighting the areas of difference versus the DOT math. Even as this isn’t a statutorily mandated disclosure, we believe the minority shareholders deserve to know,” Kotak Institutional Equities said in a March 9 report.
Stating that there is a case for better disclosures on the math from both the DOT as well as the operators, it said a detailed explanation of the calculations post the closure of the legal proceedings is a must. “It would go a long way in inspiring confidence among the minority investors.”
VIL has so far paid ₹3,500 crore out of its self-assessed liability of ₹21,533 crore, while Bharti Airtel has paid ₹13,004 crore to the government in two installments. It had also deposited an additional ₹5,000 crore as an ad-hoc payment to cover any reconciliation differences.
Similarly, Tata Teleservices has paid ₹2,197 crore in dues, and more recently an additional ₹2,000 crore to cover reconciliation differences, while the DOT estimates the liabilities to be about ₹14,000 crore.
“At some level, it is baffling that something as basic and critical as the base of revenues on which as much as 12-13% of sector revenues are paid as regulatory levies stayed a matter of dispute on principles and calculations more than two decades after NTP-1999 (the telecom policy that established revenue share as a mechanism) was introduced and implemented,” Kotak said.
It hoped that for the sake of minority investors, the telecom policy hereon leaves little room for such material disputes, and even when such disputes arise, they are settled (in or outside courts) in a more time-bound and reasonable manner. “Regulatory certainty, at the very least confidence in no regulatory shocks, is a must for healthy investor sentiments in any regulated sector,” it noted.
Total adjusted gross revenue (AGR) dues, including interest and penalty, as per the self-assessment exercise done by various telcos are 34.5% of the DOT assessed provisional dues for Bharti, 40.6% for VIL, and 16% for TTSL.