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Airtel, Vodafone-Idea move SC, For seeking review of order for payment

Bharti Airtel, Vodafone Idea , Tata Teleservices and Hughes Communications India on Friday filed a petition with the Supreme Court to review its 24 October judgement, ordering telecom companies to pay over ₹92,000 crore in dues and interest to the department of telecommunications (DoT).

 

Tata Teleservices is currently undergoing a merger with Bharti Airtel, a process DoT opposes. “It’s not a complete review of the judgement—Bharti has asked for review of the penalty, interest and the amount of interest on penalty,” an official said, requesting anonymity.

 

Levies in the telecom sector are based on a percentage of the adjusted gross revenues (AGR) of companies. The DoT contended that the telcos’ AGR should also include income from dividends and revenue from sale of handsets bundled with services, a view the companies disputed.

The apex court has asked the companies to make the payments within three months of the judgement. The DoT, in a 13 November letter, directed operators to conduct a self-assessment of dues in the wake of the SC verdict.

Bharti Airtel Ltd’s dues are around ₹21,682 crore, while Vodafone Idea Ltd will have to cough up ₹28,309 crore. Reliance Jio Infocomm Ltd’s dues are just ₹13 crore.

A three-judge bench, headed by Justice Arun Mishra, will decide if the review plea will be allowed. The bench also comprised S.A. Nazeer and M.R. Shah.

The telecom sector has been reeling under stress due to intense competition and adverse regulatory orders. The SC verdict dealt a hammer blow to the likes of Vodafone and Airtel, forcing Nick Read, the chief executive officer of Vodafone Plc.

 

Vodafone has already written off the carrying value of its share in the loss-making Indian joint venture.

With fears of billions of rupees of new debt emerging in the troubled public sector banks, which are the major lenders to telecom companies. Now the question on while seeing the recent Financial report, the telcos has shown a huge loss in thousands of crores. Now a question is on whether the accumulated loss has come in the same quarter ?

 

In a relief to telecom companies, the Union Cabinet on 20 November approved a moratorium of two years for spectrum payments. Also, starting next month, all the operators, including Vodafone, Airtel, Jio and Bharat Sanchar Nigam Ltd, will raise the prices of their services.

 

DoT notices to non-telco PSUs to pay up AGR dues

 

The department of telecommunications (DoT) has started issuing notices to PSUs whose core operations are not telecom but have a telecom licence of some nature or use spectrum for some part of their operations. These PSUs have also been asked to pay their licence fee and spectrum usage charge dues, not only on telecom-related revenues but on total revenues as per the October 24 Supreme Court order.

 

As reported earlier, once the dues of such PSUs are taken into account the total amount goes over Rs 3 lakh crore. The dues of only the telcos adds up to Rs 1.47 lakh crore.

 

As per the sources, DoT has already issued notices to GAIL, SAIL, Oil India, PowerGrid and Railtel, and is in the process of sending it to others who have taken a licence from DoT for internet services or national or international long distance, etc.

 

Earlier, the DoT had sent notices only to telecom service providers and associations of internet service providers, virtual network operators and satellite providers.

 

Meanwhile, the Internet Service Providers Association of India (ISPAI), has written to the government seeking relief from the order by stressing that internet providers were not party to the case and the financial impact on such firms could be over Rs 2.3 lakh crore, which may rise even further. The association is hoping that government will intervene in the matter and some solution can be found so that ISPs are not burdened. However, DoT officials said that even though the ISPs were not party to the matter the SC order will apply to them.