1. Reliance Jio: Bharti Airtel, Vodafone, Idea Cellular violated licence agreement, paid Rs 400 cr less to government

Reliance Jio: Bharti Airtel, Vodafone, Idea Cellular violated licence agreement, paid Rs 400 cr less to government

Reliance Jio has written to the Department of Telecom (DoT) alleging that Bharti Airtel, Vodafone and Idea Cellular have paid Rs 400 crore less of licence fees in Q4FY17 in violation of the licence agreement.

Updated: May 23, 2017 8:22 AM
The letter notes that Bharti Airtel had paid Rs 1,099.5 crore as license fee in Q3 but just around Rs 950 crore in Q4; it was Rs 746.8 crore and Rs 550 crore for Vodafone India and Rs 609.4 crore and Rs 550 crore for Idea Cellular. (Reuters)

Reliance Jio has written to the Department of Telecom (DoT) alleging that Bharti Airtel, Vodafone and Idea Cellular have paid Rs 400 crore less of licence fees in Q4FY17 in violation of the licence agreement. Under the law, RJio has said, telcos have to pay the licence fee for the last quarter of the year — by March 25 — based on the likely revenue ‘subject to a minimum payment equal to the revenue share paid for the previous quarter’. Although DoT had not agreed to the incumbent telcos’ request to relax their payment schedule, RJio has said, they had ‘unilaterally, willfully and intentionally’ paid a lower fee.

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The letter notes that Bharti Airtel had paid Rs 1,099.5 crore as license fee in Q3 but just around Rs 950 crore in Q4; it was Rs 746.8 crore and Rs 550 crore for Vodafone India and Rs 609.4 crore and Rs 550 crore for Idea Cellular. All told, according to RJio, the short payment adds up to Rs 400 crore.

According to RJio, based on the actual AGR declared by Airtel to its shareholders, the Q4 license fee should have, in fact, been around Rs 1,030 crore. While DoT is considering the incumbents’ request, RJio says this is “a gross violation of license conditions and any relief will be tantamount to rewarding a party in breach”.

Such a breach, RJio says, is normally met with a financial penalty or even termination/revocation of a license. Not doing so, it concludes, “would set a very bad precedent, wherein licensees would unilaterally decide to breach license conditions and just inform the Licensor about it”.

-By Rishi Ranjan Kala

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