SC rejects plea by telecom operators seeking more time to settle AGR duesby Rajesh Kurup
The Supreme Court on Friday rejected a plea by incumbent telecom operators seeking more time to settle Adjusted Gross Revenue (AGR) dues and has asked the companies to deposit dues by March 17. It will also begin contempt petition against the operators for not paying the dues totalling Rs 1.47 lakh crore.
The apex court also directed the telecom companies to pay a “sizeable” amount of their statutory dues on Friday, while it also asked why they were not abiding by the court order to pay AGR dues.
The Supreme Court’s three-judge panel, headed by Arun Mishra, was hearing fresh petitions filed by Bharti Airtel, Vodafone Idea and Tata Teleservices.
Vodafone Idea's future bleak with SC rejecting relaxation on AGR
“We have dismissed review plea in adjusted gross revenue case but still not a single penny deposited, the Supreme Court said on the non-payment of dues by telcos,” the court said.
The move would be a death knell to telecom operators, who have a cumulative liability of Rs 88,624 crore (Airtel Rs 35,600 crore and VIL Rs 53,000 crore). Mukesh Ambani controlled Reliance Jio Infocomm (RJio) was the only telecom operator to pay up AGR dues of Rs 195 crore, before the Supreme Court-set deadline of January 23.
Earlier in January, Vodafone Idea, Bharti Airtel and Tata Teleservices had moved a joint application before the apex court seeking modifications to the earlier ruling that said the telecom companies should pay their AGR dues before January 23.
Last month, an internal note by the Department of Telecommunications’ Licensing Finance Policy Wing said that it will not take any coercive action against incumbent operators in case they default on AGR dues as the deadline expired.
BofA Securities report
With both the review petition and the modification petition not being favorable to Vodafone Idea Ltd, India is being pushed faster towards a two-player market, according to a report by BofA Securities.
This may not be an ideal situation as the telcos networks of Bharti Airtel and Reliance Jio Infocomm (RJio) may not withstand load of 300 million users. Further, the banks have huge exposure to VIL debt and there may be a cascading effect, it said.
There would be an economic impact on GDP and job losses, it said.
Bharti Airtel, unlike VIL, has raised money and is in a position to pay the fines, it added.