Reliance Jio spared Rs 13,000 crore payout, Airtel Rs 2,000 crore

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September 2, 2020 7:20 AM

The AGR dues of RCom stand at Rs 25,199.27 crore while that of Aircel is Rs 12,389 crore and Videocon’s Rs 1,376 crore.

Only if the entire spectrum has been bought through trade, and in such cases if any past dues come to light at a later stage, does the government have the right to recover dues from either party or both.Only if the entire spectrum has been bought through trade, and in such cases if any past dues come to light at a later stage, does the government have the right to recover dues from either party or both.

The Supreme Court has provided a big relief to Reliance Jio and Bharti Airtel with regard to payment of AGR dues on behalf of companies from whom they acquired spectrum through trade and which have gone bankrupt.

The court has said in cases where only a part of spectrum was acquired through trade, the buyer cannot be made liable to pay for the AGR dues of the seller company. Only if the entire spectrum has been bought through trade, and in such cases if any past dues come to light at a later stage, does the government have the right to recover dues from either party or both.

Going by the ruling, Jio is not liable for payment of AGR dues for spectrum it bought from Reliance Communications (RCom) and Bharti Airtel is also not liable to pay the AGR dues of Aircel from which it had bought a portion of spectrum. However, Bharti would need to pay the dues of Videocon Telecommunications from which it acquired the entire spectrum, but the amount is not much.

Jio had acquired only a portion of spectrum from RCom — 47.50 Mhz in the 800 Mhz band — through trade in 2016. The same year, Bharti Airtel acquired 160 Mhz of spectrum in the 2300 Mhz band from Aircel. However, Bharti acquired the entire 30 Mhz spectrum in the 1800 Mhz band from Videocon in the same year.

The AGR dues of RCom stand at Rs 25,199.27 crore while that of Aircel is Rs 12,389 crore and Videocon’s Rs 1,376 crore.

So, Bharti would be required to pay an additional Rs 1,376 crore over and above its Rs 43,000-crore dues.

The apex court had hinted in the course of the hearings that companies like Jio and Bharti which had acquired spectrum through trade should pay the AGR dues of the bankrupt telcos as they had used the airwaves to earn revenues. It had even raised questions as to how spectrum, which is a government asset, can be sold through insolvency when the government cannot recover its dues through such a sale as it is an operational creditor.

If the two companies were made to pay for the dues accruing from part spectrum they had acquired through trade, Jio’s liability would have come to around Rs 13,000 crore while that of Bharti Airtel would have been around Rs 2,000 crore.

The DoT had told the court that the current AGR dues are only till 2016-17 and therefore does not take into account the AGR dues arising out of the traded spectrum by Jio and Bharti Airtel as the trade happened around that period. It had said it is computing the dues after 2016-17, which would include the liabilities of the traded spectrum and present before the court.

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