Three telcos to seek urgent SC hearing as deadline to pay dues nears

Bharti Airtel, Vodafone Idea Ltd, Tata group want to negotiate with telecom department on the timeframe for paying dues

Three telecom operators will appeal before the Supreme Court on Monday to allow them and the department of telecommunications work out a timeframe for paying dues they owe the government for Adjusted Gross Revenue (AGR).

Bharti Airtel, Vodafone Idea Ltd and the Tata group will request the court to hear their petition urgently by Tuesday as the deadline for them to pay Rs 1.47 trillion as AGR ends on January 24.

The court, on October 24 last year, had ordered telecom companies to pay their licence fee and spectrum user charges (SUC) dues within 90 days. Failure to pay the dues could lead to contempt of the court.

Sources said Sunil Mittal, chairman of Bharti Airtel, and Kumar Mangalam Birla, chairman of Vodafone Idea, are believed to have met the telecom secretary on Saturday to discuss the dues.

Telecom companies holding discussions on a possible staggered payment plan--if they get the Supreme Court’s permission. The Cellular Operators Association of India (COAI), the apex association of the industry, has suggested a 10-year staggered payment scheme with a two-year moratorium, but that is based on the assumption that companies will pay the dues without interest or penalty.

Companies argue that the government has earned about Rs 17,500 crore from license fee and spectrum user charges. “We are no longer questioning the amount that we have to pay. The important question is how do we pay it in a staggered way especially as most of the companies are public limited with shareholders and ensure it is a viable business,” said Rajan Matthew, director general of COAI.

Matthew said the government has leeway as the union budget had not considered this large amount while fixing the revenues from AGR and SUC.

He points out that companies are in discussions to look for a model by which they do not have to take huge additional burden on their books every year. “Our plea will be for a reduction in license fee and SUC which totally comes to 13 per cent of AGR. We will appeal to the government that they could reduce this amount in such a way that it could neutralize the additional burden due to the AGR dues”.

The industry has to fork out between Rs 10,000 crore-Rs 14,000 crore--not including interest and depending on how many companies--pay as AGR dues due to the Supreme Court order. If the SUC and license fee are halved, it could mean a saving of around Rs 8500 crore for the companies annually.

The three companies appealing before the top court have to fork out a total of Rs 1.05228 trillion based on calculations made by the telecom department on their total dues. Vodafone Idea has to pay the most: Rs 53,000 crore.

The Tata group has left the telecom business.