Telenor-Viom Row over High Fuel Bills Goes to Arbitration
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