13 Nov 2019
Mobile providers Vodafone Idea and Bharti Airtel are set to petition the Supreme Court this week asking the apex court to review elements of its recent ruling which ended a decade-long feud between the government and the telecom industry on how adjusted gross revenue (AGR) is calculated, the Economic Times writes. In its decision, the court had backed the government’s stance that revenue from non-core items such as interest, dividends and the sale of fixed assets should be included when assessing AGR – the figure on which operators’ licence and spectrum are based – leaving mobile providers with a total bill of around INR1.3 trillion (USD18.2 billion) in licence and spectrum fees, plus interest and penalties. Citing people familiar with the matter, the paper notes that Airtel and Vodafone Idea, the two companies worst-affected by the ruling, are seeking a limited review of the decision targeting specific non-core items and will ask for the interest an penalties portion of the dues to be waived or reduced.
In a related development, Vodafone Group’s CEO Nick Read described Vodafone Idea’s condition as ‘critical’ and warned that the company may face liquidation of the government does not take steps to lessen the financial burden on the sector. The official blamed regulations and ‘excessive’ taxes for reducing the unit’s carrying value to zero, and stated that the UK-based group would not infuse any further capital into the venture.