A review of the calculation of the amount owed by telecommunication companies (telcos) and allowing them to pay in installments are two of the ways the government is evaluating to address the crisis in the sector without walking back on the Department of Telecommunications’ position that telecom companies (telcos) have to pay their dues.
This position that the dues as measured by a proportion of adjusted gross revenues. Also, AGR one upheld by the Supreme Court’s October 2019 verdict that ordered telcos to pay up Rs 1.47 lakh crore.
Government responds to SOS from telecommunication companies
Two officials familiar with the matter said the government is considering various options because it wants to prevent any telco from going out of business, something that would, given the size and importance of these firms, adversely affect the investor’s sentiment, restrict consumers’ choice and increase stress in the banking sector. The officials, who asked not to name. Also, mentioned that soft loans are another option being considered, although it wasn’t immediately clear who would underwrite the cost of these.
Since the telcos have raised questions about the computation of the amount and pointed out what they think are discrepancies, there could be a recalculation of adjusted gross revenue by an independent agency, perhaps an audit firm, the officials said. The package will be absolutely within the ambit of the Supreme Court’s judgment, they said.
The court had harsh comments for both DoT and the telcos
On February 14, the court had harsh comments for both DoT. Also, the telcos for not adhering to its original order. However, summoned the managing directors of the latter to court. Also, on the date of the next hearing (March 17) if they had not paid up by then. “The government has sought legal opinion in the light of the recent verdict of the Supreme Court before it will take a final call in a day or two,” one of the two officials said.
According to the officials at least three senior cabinet ministers directly involved in this matter. Bharti Airtel chairman Sunil Mittal on Thursday met telecom minister Ravi Shankar Prasad, they said. “AGR an unprecedented crisis for the industry. Also, which is being dealt with by government,” Mittal quoted as saying by news agency PTI. Mittal and Vodafone Idea Chairman Kumar Mangalam Birla met finance minister Nirmala Sitharaman individually on Wednesday.
DoT asked all telecom companies to repay AGR dues immediately
DoT last week asked all telecom companies to repay AGR dues immediately. Also, as per the October 24, 2019 verdict of the Supreme Court. According to the verdict, telcos expected to pay AGR dues of about Rs 1.47 lakh crore by January 23, 2020. Airtel owes around Rs 35,000 crore and Vodafone about Rs 55,000 crore.