AGR Dues Issue: DoT Officials Meet To Discuss Relief Measures For Telecom Industry
A telecom tower. (Photographer: Susana Gonzalez/Bloomberg)

AGR Dues Issue: DoT Officials Meet To Discuss Relief Measures For Telecom Industry

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Senior officials of the Department of Telecommunications met on Sunday to discuss urgent relief measures that can be extended to the AGR dues-hit telecom industry.

The meeting lasted for over an hour and is said to have deliberated on options before the government to provide much-needed lifeline to operators against annual gross revenue dues.

Bharti Airtel Ltd.’s Chairman Sunil Bharti Mittal had last week made an appeal to the government for cut in levies and taxes to pull the sector out of what he had described as an "unprecedented crisis".

DoT officials remained tightlipped after high-level government meeting on Sunday, where officials from NITI Aayog and the finance ministry were also said to have been present. DoT Secretary Anshu Prakash remained unavailable for comments.

The crucial meeting comes at a time when the telecom companies are staring at Rs 1.47 lakh crore in unpaid dues—Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges.

Of the estimated dues, which include interest and penalty for late payments, Bharti Airtel and Vodafone Idea Ltd. owe about 60 percent.

Airtel has raised $3 billion in the last few months and is expected to have sufficient funds to tide over the AGR crisis. Vodafone Idea—which has paid only 7 percent of its total Rs 53,000 crore statutory dues—remains deeply vulnerable.

The government, meanwhile, is looking to strike a balance between complying with the Supreme Court order on AGR dues, ensuring health of the sector, and safeguarding consumer interest.

Both Mittal and Vodafone Idea Chairman Kumar Mangalam Birla met top government functionaries throughout last week to seek prompt measures that would offer a breather to the sector.

The government is said to be keen on ensuring adequate competition by retaining the present three-plus-one model of competition (three private players and one public sector company).

The statutory dues arose after the Supreme Court had in October last year upheld the government's position on including revenue from non-core businesses in calculating AGR dues of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.

Also Read: Can Insolvency Be A Cure For AGR-Hit Vodafone Idea?

The Supreme Court earlier this month rejected a plea by mobile carriers for extension in the payment schedule and asked all of them to deposit an estimated Rs 1.47 lakh crore in past dues for spectrum and licences. It threatened to initiate contempt proceedings against top executives of these firms for non-payment.

Some telecom firms are already struggling with mounting losses and debt and the additional liability has raised concerns of them defaulting on existing loans.

Vodafone Idea has so far paid only Rs 3,500 crore in two tranches. Airtel has paid Rs 10,000 crore out of its estimated liability of over Rs 35,000 crore. Tata Teleservices has paid Rs 2,197 crore, the entire outstanding it believes to have arisen after the Supreme Court’s Oct. 24 ruling.

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