SC dismisses review plea by telecom majors on AGR dues

Supreme Court Dismisses Plea of Telcos Seeking Review of Verdict on Recovery of Past Dues

"While we respect the Supreme Court's order dismissing the review petition on AGR order, the telecom sector is deeply disappointed", said COAI Director General Rajan Mathews. Dismissing the plea, a bench of Justices Arun Mishra, S. Abdul Nazeer and M.R. Shah. An independent panel can examine such requests provided the companies commit to pay some amount immediately, the official said.

Birla's remark had come close on the heels of Vodafone Group CEO Nick Read's statement in November previous year that the joint venture between the Aditya Birla Group and Vodafone Plc may head for liquidation of India business if the government does not ease spectrum fees. The telecom companies had sought an open court hearing on their review petition but the Supreme Court made a decision to stick to its convention of doing an in-chamber hearing.

Also read: Infographic: Can telcos survive Rs 93,000 crore AGR blow?

"It is going to be a disaster for the telecom industry". This is bad optics for India which wants to attract foreign investment, not see it leave.

In its statement after the judgment, Bharti Airtel said they were evaluating filing a curative petition. "We believe the long-standing disputes raised regarding the AGR definition were bonafide and genuine".

"The industry continues to face severe financial stress and the outcome could further erode the viability of the sector as a whole", Bharti Airtel said in a statement, adding that the interest, penalty and interest on penalty form nearly 75% of the dues.

"The money now required to pay punitive interest, penalty and interest on penalty which forms almost 75% of AGR dues would have better served the digital mission of the country", Bharti Airtel said in a statement.

In its statement, Bharti said what the industry needs now is continuous investments in expanding networks, acquiring spectrum, and introducing new technologies like 5G.

In a stock exchange filing, Vodafone-Idea said: "The company is exploring further options, including filing of a curative petition".

Vodafone Idea's share of the penalties was 530.39 billion rupees or about US$7.5 billion, with payment also due in a week. "Irrespective of the final outcome on the AGR case, Airtel remains best positioned from a medium term perspective".

In October, the top court had upheld a demand by the country's telecommunications department which has been at odds with the operators over the way the industry calculated the adjusted gross revenue.

Shares of Vodafone Idea tanked over 39% on Friday to ₹3.66 while shares of Sunil Bharti Mittal-led Bharti Airtel gained over 4% to touch its 52-week high of ₹498.65 in a firm Mumbai market as investors anticipate a two-player market in the India telco field.

In an affidavit filed earlier in the top court, the DoT said Airtel owed Rs. 21,682.13 crores as licence fee to the government and dues from Vodafone totalled Rs. 19,823.71 crores, while Reliance Communications owed Rs. 16,456.47 crores. The October 24 verdict had widened the definition of AGR to include non-core revenue, leaving telcos and even non-telcos facing hefty statutory dues of more than ₹4.45 lakh.

This added financial pressure on the sector would also adversely impact Prime Minister Narendra Modi's vision of "digital India", Mathews said.

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