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Telecom stocks in action ahead of SC hearing

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Shares of two out of three telecom companies were trading higher ahead of the Supreme Court hearing on the telecos' plea on AGR-related dues scheduled for today.

Vodafone Idea surged 12.05% to Rs 5.02 while Bharti Airtel rose 0.82% to Rs 544.20. Tata Teleservices (Maharashtra) fell 3.30% to Rs 3.52.

The Supreme Court will hear fresh pleas of telecom firms, including Bharti Airtel, Vodafone Idea and Tata Teleservices, seeking a new schedule of payment of statutory dues to the tune of Rs 1.47 lakh crore to the Department of Telecommunications.

A bench of justices Arun Mishra, S Abdul Nazeer and M R Shah will hear a batch of petitions filed by telecom companies in open court.

The pleas filed by Vodafone Idea, Bharti Airtel, and Tata Teleservices have sought more time for payment of adjusted gross revenue (AGR) related dues. The telecom companies want to negotiate a fresh payment schedule with the Department of Telecommunications (DoT), which has issued demand notices to them.

The Supreme Court on January 21 agreed to hear the modification plea filed by telecom operators on giving them more time to pay off adjusted gross revenue (AGR) related dues.

The development will allow telecom operators to negotiate a sustainable payment schedule for AGR dues. The Cellular Operators Association of India had earlier sought a 14-year period to pay off these dues.

Earlier on 16 January, the apex court had dismissed review petitions of telecom firms seeking review of its earlier order asking them to pay Rs 1.47 lakh crore in statutory dues by January 23, saying it did not find any "justifiable reason" to entertain them.

The Supreme Court in October 2019 had ruled in favor of the government on the AGR (adjusted gross revenue) issue, with grave revenue implications to the tune of over Rs 92,000 crore for the ailing telecom sector.

AGR is the basis on which DoT calculates levies payable by operators. Telecom operators are liable to pay around 3-5% and 8% of the AGR as spectrum usage charges and licence fees, respectively, to DoT.

Telcos argued that AGR should comprise revenue from telecom services, but DoT insisting that AGR should include all revenue earned by an operator, including that from non-core telecom operations.

The apex court upheld the definition of AGR provided by DoT, putting an end to a 14-year old legal battle between telecom operators and the government.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, February 14 2020. 09:34 IST
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