Telcos to miss Jan 24 AGR deadline, wait for 'modification' plea hearing

Leading telecom companies including Bharti Airtel, Vodafone Idea, and Tata Group are planning to communicate to the Department of Telecommunications (DoT) that while they will comply with the Supreme court order on paying adjusted gross revenue (AGR) dues, they will wait till next week, when their “modification” petition is heard in the apex court, before paying. 

The move means the telcos will skip the January 24 deadline the court gave for paying the government Rs 1.47 trillion.

While the three companies said they would not comment on the issue, top sources said Bharti Airtel would send the letter on Thursday.

About others it is not clear whether they sent a communication on Wednesday or are considering doing it on Thursday.

According to top sources close to Reliance Jio, the telco is expected to pay its entire dues of Rs 177 crore on Thursday and has provisioned for the liabilities in its latest financial results. 

Jio had not been party to the review petition and had a different stance on the matter. 

Telecom companies have to pay Rs 1.47 trillion as AGR to the government on the basis of the Supreme Court order in October last year.

After a review petition against the judgment was rejected, the three telcos filed a “modification petition” before the apex court this week.

A Bench headed by Chief Justice of India S A Bobde agreed to list this petition “sometime next week”, after the deadline, with the same Bench that handled the review petition. 

The telcos in their petition sought a change in the payment deadline for their dues as well as permission to engage with the DoT on the terms and timing of payment. It means they are looking at, just as in the case of spectrum, a staggered payment plan, which could include a moratorium for a few years.   

An official on Tuesday said the DoT had to take action in case the telcos did not pay their dues by January 24. 

Lawyers say that in the case of a default, the DoT can immediately encash the bank guarantees of the telcos, and of these there are precedents. 

However, as the guarantees do not match the Rs 1.47 trillion in question, it could issue a show-cause notice as to why their licences will not be cancelled and give the telco a stipulated amount of time to respond to the query. 

Officials of the Cellular Operators Association of India say that they, basing themselves on their talks, do not see the department taking a tough posture because of the serious financial crisis in the industry.  

Lawyers advising the telcos have pointed out that there are enough precedents of the Supreme Court not executing its earlier order when fresh adjudication is in process in the same court. 

Lawyer C A Sundaram, who is representing a telco, told the apex court that they were not disputing the payment to be made; rather, they want to work out a fresh schedule of payment.