Telecom Firms Pay Over Rs 8,000 Crore In Dues, DoT Questions Their AGR Math
A taxi driver uses a mobile phone as he sits in his taxi in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Telecom Firms Pay Over Rs 8,000 Crore In Dues, DoT Questions Their AGR Math

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India’s private telecom firms paid more than Rs 8,000 crore towards deferred spectrum dues, even as the telecom department raised fresh questions on their self-assessment of AGR dues.

While Vodafone Idea Ltd. has paid about Rs 3,043 crore for deferred spectrum dues, Bharti Airtel Ltd. submitted Rs 1,950 crore and Reliance Jio Infocomm Ltd. Rs 1,053 crore for the same. The Tatas deposited Rs 2,000 crore for ad hoc statutory liabilities.

This was the last lot of payments that telecom firms made towards deferred spectrum dues as the government had late last year approved a two-year moratorium on such liabilities.

The government’s Department of Telecommunications, meanwhile, is preparing to send out letters to the telcos regarding a mismatch in amount of AGR dues assessed by them and its own calculations. According to sources, the self-assessed amounts “are woefully less than" DoT's AGR estimates.

The letters would go out within a day or two to the telecom companies, they said.

The DoT has also asked all telecom companies to furnish names of their managing directors and their addresses, sources said, adding that the move was taken as per directive of the Supreme Court last month.

On Tuesday, Vodafone Idea's Chief Executive Officer Ravinder Takkar met Telecom Secretary Anshu Prakash but refused to comment on the outcome of the meeting.

Vodafone Idea

The fresh payments made by the joint venture of Aditya Birla Group and UK’s Vodafone Group Plc assume significance against the backdrop of the severe financial stress that the company is facing. Before Tuesday, the company had paid just Rs 3,500 crore of its total Rs 53,000 crore AGR dues.

In a Feb. 27 letter to the DoT, Vodafone Idea proposed tariff hikes to raise revenue and expressed its inability to pay up $3.5 billion to the government.

As part of the letter, the telecom operator asked the new “floor price” to be made effective from Apr. 1, 2020. The price hikes will “ensure that sector is fully sustainable and in a position to pay deferred spectrum, and AGR dues and still invest to create world-class networks and services”, the letter said.

Bharti Airtel

Couple of days later, on Feb. 29., Bharti Airtel said it has made an additional payment of Rs 8,004 crore towards AGR dues. This was in addition to the Rs 10,000 crore the company paid on Feb. 17, 2020, in compliance with the Supreme Court's Oct. 24 judgment.

The company said it calculated the liabilities on a self-assessment basis from 2006-07 till Dec. 31, 2019, and the payment includes interest up to Feb. 29, 2020.

According to DoT estimates, Airtel owes nearly Rs 35,586 crore, including licence fee, spectrum usage charges with interest on the unpaid amount, penalty and interest on penalty till July 2019.

The AGR Case

In all, 15 entities owe the government Rs 1.47 lakh crore in unpaid statutory dues—Rs 92,642 crore in unpaid licence fee and Rs 55,054 crore in outstanding spectrum usage charges. Bharti Airtel and Vodafone Idea account for about 60 percent of this.

These dues arose after the Supreme Court, on Oct. 24, 2019, upheld the government's position on including revenue from non-core businesses in calculating annual AGR of telecom companies. On Feb. 14 this year, it rejected a plea by telcos for extending the payment deadline and threatened contempt proceedings against senior executives of the companies.

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