AGR matters back in Supreme Court: DoT, telcos differ in calculation of dues pending; apex court to decide

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April 04, 2021 4:30 AM

The issue of further payment and the total amount due by telecom operators Bharti Airtel, Vodafone Idea and Tata Teleservices is back in the Supreme Court, which will now have to decide on the matter.

telecomIn January’21, mobile broadband penetration in India stood at 63.3%, up 680bps from 56.5% in January’20, despite 30-40% tariff hike.

The issue of further payment and the total amount due by telecom operators Bharti Airtel, Vodafone Idea and Tata Teleservices is back in the Supreme Court, which will now have to decide on the matter. Last year in September, the Supreme Court had ordered that the companies need to pay their dues over a 10-year period, after paying 10% of the dues upfront by March 31, 2021. Thereafter, the deferred payment cycle would run till 2031 with the 10% amount to be paid by March 31 every year.

However, none of the three companies paid the 10% of the due amount on March 31, 2021. The reasoning of the companies is that whatever they have paid so far is more than 10% so they were not required to pay anything extra by the March 31 deadline. For instance, the total dues of Bharti as per the department of telecommunications is Rs 43,980 crore and before the SC’s final order, it had paid Rs 18,004 crore. Similarly, the total dues of Vodafone stood at Rs 58,254 crore and it had paid Rs 7,854 crore. In the case of Tata Teleservices, the total amount is Rs 16,798 crore and it had paid Rs 4,197 crore.

However, the DoT’s interpretation of the order is different. It said that the apex court did not mean 10% of the total dues but 10% of the balance dues, so the operators were required to shell out additional amount. Now, since the companies have not paid any additional amount, the DoT will file a status report in the SC and wait for further directions. The matter does not end here, as there’s another point which the companies have raised, which the SC had agreed to hear but not fixed a date so far.

All the three telecom operators have petitioned the apex court seeking modification of its order so that DoT can consider their submissions regarding arithmetical errors in the calculations regarding the AGR dues. For instance, Vodafone Idea in its petition has stated that the calculations made by DoT had errors like double counting, not considering payments already made, not adjusting for interconnect payments, etc. It has said that the excess demand due to these errors is to the tune of Rs 5,932 crore of principal amount, which would have an overall impact of over four times on the total principal amount due to imposition of interest, penalty and interest on penalty.

The company has made it clear in its petition that it is not seeking any reassessment of the calculations, something which the SC order has barred, or raising any dispute, but only seeking correction in these arithmetical errors. The petition of Bharti Airtel, which was filed before Vodafone Idea’s, is also on similar grounds. “There are a number of apparent arithmetic errors in DoT’s demands, such as duplications in revenue addition, errors of omission and errors of commission, which have nothing to do with the inclusion or exclusion of a particular head of revenue (taking the heads of revenue as final as per the AGR judgement dated October 24, 2019),” Bharti has stated.

Tata Teleservices has also filed a petition on similar grounds. Though in February last week the SC had agreed to hear the petitions, it has so far not given a date. Both DoT officials and industry executives feel that both the issues, whether they need to pay 10% of the total amount as first installment or the balance amount, and the rectification of arithmetical errors, maybe clarified and considered when the matter comes up for hearing.

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