Department of Telecom notice asks telcos to comply with supreme court order

NEW DELHI: The Department of Telecom (DoT) on Wednesday shot off notices to telecom operators asking them to self-assess pending dues, make payment and file requisite documents within the timeframe stipulated by the Supreme Court.

The SC, on October 24, had ruled that adjusted gross revenue (AGR) also included non-telecom receipts and directed telcos to cough up a whopping Rs 92,640 crore in pending dues, penalties and interest within three months.

AGR is used to calculate a host of levies including license fees and spectrum usage charges. The notices come a day after Vodafone Group CEO Nick Read red-flagged possible liquidity issues at Vodafone Idea (VIL) arising from AGR liabilities, writing down its book value to zero.

“It is the responsibility of licensees to pay licence fees and other dues after carrying out their own assessment as prescribed in the licence agreement. You are therefore directed to make the payment in accordance with the order of Supreme Court and submit requisite documents to ensure compliance within the stipulated timeframe,” the notice said.

Bharti Airtel and VIL stand liable to shell out Rs 21,682 crore and Rs 28,310 crore respectively, while other firms like the bankrupt Reliance Communications (Rs 16,456 crore), BSNL (Rs 2,098.72 crore) and MTNL (Rs 2,537.48 crore) are also liable to pay substantial amounts. New entrant Reliance Jio’s liability, however, only stands at a measly Rs 13 crore. The notices come even as a panel of secretaries headed by Cabinet Secretary Rajiv Gauba examines measures to relieve telecom sector stress, including AGR dues.

COAI director general Rajan Mathews, however, says that the notices are a procedural development. “The DoT is following due process arising from the SC verdict. We believe this to be a procedural matter and we are still looking for relief from the government,” he told TNIE. Telcos are required to declare their AGR-based dues periodically to the Centre and will need to recalculate liabilities based on the SC verdict.
Both VIL and Airtel are expected to release their Q2 results on Thursday, which analysts say would give clarity over how they plan to provide for the mammoth payments.

RCOM Asset sale

Reliance Communications’ creditors on Wednesday extended the deadline to submit bids for RCom assets by 10 more days following a request from Reliance Jio, PTI said quoting sources. Bharti Airtel, Bharti Infratel and private equity firm Varde Partners have submitted bids for RCom assets.