Airtel, Vodafone-Idea, others face Rs 1.4 lakh cr payout after SC order

Bharti Airtel, Vodafone-Idea and other telecom operators may have to pay the government a whopping Rs 1.4 lakh crore following a Supreme Court order that sent shock waves through an industry already grappling with billions of dollars in debt and an intense tariff war to retain customers.

The top court upheld the government's position on including revenue from non-telecommunications businesses in calculating the annual adjusted gross revenue (AGR) of telecom companies, a share of which is paid as licence and spectrum fees to the exchequer.

While the government had raised a demand of Rs 92,000 crore from Bharti Airtel, Vodafone, Idea and many now-defunct telecom operators in licence fees based on revised revenue, the actual payout will be around Rs 1.4 lakh crore after including spectrum usage charge, penalty and interest, official sources said.

Over the next few days, the numbers will get further calibrated, the sources added.

Older telecom companies would be the worst hit, while richest Indian Mukesh Ambani's Reliance Jio, which entered in 2016, owes the least among all.

Shares of Vodafone-Idea plunged 23 per cent to a record low after the Supreme Court verdict, while Airtel tumbled as much as 9.7 per cent before reversing the losses. Reliance Industries, the parent of Jio, rallied 3.2 per cent.

"Fresh calculation will be done now for all the liabilities of telecom operators. The total amount is around Rs 1.34 lakh crore. It is likely to go up by 4-5 per cent as the liability of one more quarter will get added to it," an official source told PTI.

Bharti Airtel faces the highest liability of around Rs 42,000 crore after including licence fees and spectrum usage charges, while Vodafone-Idea may have to pay about Rs 40,000 crore. Jio may have to pay just Rs 14 crore or so.

Not much of the remaining amount may be realised as other operators such as Aircel and Reliance Communications are under insolvency proceedings.

"We are disappointed with the verdict," Airtel said in a statement. "This decision has come at a time when the sector is facing severe financial stress and may further weaken the viability of the sector as a whole. The government must review the impact of this decision and find suitable ways to mitigate the financial burden on the already stressed industry."