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AGR woes: No decision on relief to telcos at crucial meet

Source: PTI  -  Edited By: Nandita Malik
February 28, 2020 22:31 IST

Telecom companies have been desperately waiting for a bailout package from the government after a Supreme Court order put their statutory liabilities at Rs 1.47 lakh crore.

The crucial meeting of Digital Communications Commission (DCC) on Friday could not arrive at a decision on relief to the distressed telecom sector as government officials said more details are required for reconciliation of data on statutory dues.

In a day of hectic parleys at DoT, Vodafone Idea (VIL) CEO and MD Ravinder Takkar also met Telecom Secretary Anshu Prakash but refused to comment on the details of his discussion.

 

Telecom companies have been desperately waiting for a bailout package from the government after a Supreme Court order put their statutory liabilities at Rs 1.47 lakh crore, and all eyes were on the DCC meet for the much-needed breather to fix the AGR imbroglio.

In fact, just days ahead of the Friday meeting of DCC, Vodafone Idea - which is the most vulnerable of the lot - told the government that it would not be able to pay the Supreme Court mandated Rs 53,000 crore dues unless state support is extended to survive the crisis.

VIL had made a strong plea for setting off Rs 8,000 crore of GST credits, a three-year moratorium on payment of the remaining amount which should be staggered over 15 years at a simple interest rate of 6 per cent, drastic cut in licence fee and fixing of a minimum price of calls and data.

While telecom department officials insisted that DCC meeting on Friday did not focus on AGR issues but rather on project implementation for PPP on Bharat Net project, a source present at the meeting said no decision on telecom relief was taken at the meeting although discussion did take place.

DCC, the highest decision-making body of the government on telecom, discussed the issue and looked at options at the meeting which lasted two hours.

Further discussions are needed, and the DCC is likely to meet again in the coming days but no date has been fixed for the next meeting, they said.

The telecom department is awaiting more details required for reconciliation of AGR data, sources added.

"A lot of discussion would be needed, AGR related data needs to be assessed," the source said.

The DCC includes CEO of NITI Aayog, and secretaries of Ministries of Electronics and IT, DoT, Department of Economic Affairs, and Department for Promotion of Industry and Internal Trade, besides other senior officials of the telecom department.

VIL, which had last week paid Rs 3,500 crore to the government - still only seven per cent of its total dues - in a recent letter to the Department of Telecommunications (DoT) said it is "not in a sound financial state" to settle the liability and sought "urgent support from the government".

The Cellular Operators' Association of India (COAI), in a separate, almost similar letter, also urged the government for easier terms for payment of dues by telcos including loans at lower rates to settle liability, as also an urgent implementation of floor prices for call and data.

The embattled industry is aggressively pitching for cut in licence fee to three per cent from the current eight per cent, and has also sought reduction in spectrum usage charges (SUC) to bail out of what it describes as an unprecedented crisis.

Blaming the below-cost pricing of telecom services, compelled by competitive pressures as being the root cause of financial stress, VIL has sought immediate implementation of floor price in tariffs.

It said a floor price needs to be immediately made effective, say from April 1, 2020 to ensure that the sector is fully sustainable and in a position to pay deferred spectrum and AGR dues and still invest to create world-class network and services.

The company argued that the introduction of floor price will enable revenue of the telecom sector to nearly double from the current level of Rs 1.75 lakh crore.

VIL chairman Kumar Mangalam Birla has, in the past, made it amply clear that the company will fold if it is forced to make payment of over Rs 53,000 crore dues.

Birla has held multiple rounds of discussions with the finance minister and the telecom minister over the last few days to explore options to keep the company afloat.

In all, as many as 15 entities owe the government Rs 1.47 lakh crore -- Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges.

These dues arose after Supreme Court, in October last year, upheld the government's position on including revenue from non-core businesses in calculating the annual Adjusted Gross Revenue (AGR) of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.

The Supreme Court earlier this month rejected a plea by mobile carriers such as Bharti Airtel and VIL for extension in the payment schedule and asked them to deposit an estimated Rs 1.47 lakh crore in past dues for spectrum and licences.

Airtel has so far paid Rs 10,000 crore against DoT estimated dues of over Rs 35,000 crore, while Tata Teleservices has paid Rs 2,197 crore as full and final settlement for all its dues.

Meanwhile, the government is also asking telecom companies including Vodafone Idea, Bharti Airtel and Tata Teleservices to submit supporting documents on AGR self-assessment that formed the basis of their statutory dues calculation.

The exercise will help the DoT examine the AGR calculations being made by the telecom players.

Once substantiating documents are filed by the companies, the telecom department will initiate random test checks on the AGR calculation in a time-bound manner.

The 'test check' will be done for any one year (of telcos' dues) to examine the deviation between telecom companies' assessment and the government calculation of AGR liabilities.

As it is, DoT officials have made it clear that any relief extended to companies like VIL would be contingent upon them making additional payments. In the case of Tata Teleservices, officials maintain that the department is not satisfied with the Tatas' calculation of its overall liabilities (Rs 2,197 crore against the government's preliminary assessment of about Rs 14,000 crore) and will be sending a notice to the company.

Photograph: Rupak De Chowdhuri/Reuters

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Source: PTI  -  Edited By: Nandita Malik© Copyright 2020 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.
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