Te­lenor-Viom Row over High Fuel Bills Goes to Ar­bi­tra­tion

The Economic Times - - Com­pa­nies - DEEPALI GUPTA

Ar­bi­tra­tion pro­ceed­ings will start on Thurs­day over a dis­pute between the lo­cal unit of Nor­we­gian tele­com ma­jor Te­lenor and tower provider Viom Net­works over the cost of fuel used for pow­er­ing tele­com equip­ment. The case’s out­come will be keenly watched by other play­ers in an in­dus­try where tower com­pa­nies and their cus­tomers of­ten dis­agree on the cost of fuel, used mainly to keep tele­com sites run­ning dur­ing power out­ages. The dis­pute has reached the ar­bi­tra­tion stage af­ter the Delhi High Court, fol­low­ing a com­plaint of in­flated bills filed by the Te­lenor unit, asked the tele­com op­er­a­tor to pay .` 22 crore ev­ery month to Viom to­wards the cost of fuel and power. The amount is more than the .` 15 crore that Uni­nor, Te­lenor’s lo­cal unit, has been pay­ing, but less than the .` 25-27 crore sought by Viom since April. The fi­nal amount — as de­cided by the ar­bi­tra­tion court — would be ad­justed against the .` 22 crore that the court has asked Uni­nor to pay. Re­spond­ing to Uni­nor’s al­le­ga­tions at the high court, Viom had ac­cused it of not pay­ing bills, and run­ning up ar­rears of .` 290 crore. The court asked the Te­lenor unit to pay .` 15 crore to­wards the out­stand­ing amount and col­lat­er­alised Uni­nor’s equip­ment in­stalled at Viom’s sites in an­tic­i­pa­tion of a res­o­lu­tion of that amount in the ar­bi­tra­tion. “The court has pro­vided an in­terim so­lu­tion to both par­ties that al­lows for ser­vices to con­tinue un­in­ter­rupted while the mat­ter is re­solved between the par­ties,” a Uni­nor spokesman said. Viom de­clined to com­ment. Prior to the rul­ing, the court had al­lowed Uni­nor to sup­ply diesel to the tower sites where it has in­stalled equip­ment to en­sure ser­vice was not halted. Uni­nor is Viom’s largest cus­tomer out­side ma­jor­i­tyshare­holder Tata Te­le­ser­vices. Main­tain­ing cor­dial ties thus is crit­i­cal for both par­ties. Ex­perts say diesel pil­fer­age at tele­com tow­ers accounts for nearly 20% of fuel costs that are for­warded by tower op­er­a­tors to tele­com op­er­a­tors. Op­er­a­tors of­ten ob­ject to ac­cept the cost from pil­fer­age, and pay only a part of the bills raised. Tower com­pa­nies say this af­fects their cash flow. Since diesel is bought against cash, ar­rears not only af­fect prof­its, but also re­strict the abil­ity to buy more diesel to keep the sites run­ning, they say.

The out­come of the case, which be­gins on Thurs­day, will be keenly watched by an in­dus­try where tower cos and their cus­tomers of­ten dis­agree on the cost of fuel

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.