AGR case: COAI says govt has vast powers to address telecom sector's issues

Of the three private players, market analysts consider Vodafone Idea to be in the most vulnerable position

Industry body COAI on Saturday asserted that the government has "vast powers and options" to address the sector's issues, even in the light of the Supreme Court order on payment of statutory dues.

A day after the Supreme Court rapped the telecom department and companies over non-compliance of its order on payment of statutory dues, COAI Director General Rajan Mathews told PTI that it is up to individual members (companies) to see how they would interpret and comply with the SC order.

"We continue to believe that government has vast powers and options to address the issues of the sector even in the light of the SC order," Mathews said.

Meanwhile, after UP (West) and Rajasthan, the DoT's field offices in circles of Gujarat, UP (East), West Bengal and others zones have directed telecom companies to pay up outstanding dues "immediately" failing which action would be initiated based on provisions of licence agreement "without any further notice".

A notice issued by UP (East) circle to telecom operators said the office of Controller of Communication Accounts will remain open on Saturday to facilitate payment of statutory dues by the companies.

Mathews said that while Cellular Operators' Association of India (COAI) sees plenty of opportunity for mobile operators to flourish, enabling policies and regulations will be key to this.

Citing COAI's position that the industry has to move quickly to a Rs 300 ARPU (Average Revenue Per User) level to maintain its financial health, Mathews said that the SC order only makes this imperative "more urgent".

"We have stated before that present tariffs are inadequate to sustain the financial health of the sector and the industry has to move quickly to a Rs 300 ARPU number to maintain its financial health. The SC order only makes this imperative even more urgent," Mathews said.

On Friday, the SC had directed the managing directors and directors of telcos and other firms to explain why contempt action be not taken against them for non-compliance of its order to pay adjusted gross revenue (AGR) of Rs 1.47 lakh crore to the Department of Telecom (DoT).
 

After Supreme Court rap, the telecom department on Friday had begun issuing orders asking firms such as Bharti Airtel and Vodafone Idea to clear past dues immediately.

The Supreme Court has asked companies to clear dues, totalling an estimated Rs 1.47 trillion, before the next date of hearing on March 17.

Airtel on Friday responded to the DoT order by offering to pay Rs 10,000 crore by February 20 and the remaining before March 17. Airtel owes nearly Rs 35,586 crore, including licence fee and spectrum usage charge, to the government.

Vodafone Idea, in a regulatory filing on Saturday, said it is assessing the amount that can be paid towards adjusted gross revenue (AGR) dues, although it reiterated that continuation of business in India will depend on "a positive outcome" of its modification plea filed before the apex court.

"The Company proposes to pay the amount so assessed in the next few days," said VIL, which is confronted with dues of over Rs 53,000 crore.

COAI's Mathews said that "duopoly is not in the best interest of the nation, customers or even the industry".