Trio submit payment towards USD14bn AGR bill

18 Feb 2020

Bharti Airtel, Vodafone Idea and Tata Teleservices Limited (TTSL) have submitted part payment of dues related to the Supreme Court’s October 2019 decision on Adjusted Gross Revenue (AGR), the Economic Times writes. The trio owe a combined total of around INR1.02 trillion (USD14.3 billion) – the lion’s share of a total bill of around INR1.47 trillion issued to providers – in backdated licence and spectrum fees, with payment due on 23 January 2020. With the exception of Reliance Jio Infocomm (Jio) – which reportedly cleared its comparatively small bill of INR1.95 billion before the deadline – the affected providers had not paid anything towards the bill whilst they waited for permission from the apex court to arrange a payment schedule with the Department of Telecommunications (DoT). The DoT, for its part, had opted not to take coercive action against the telcos – again awaiting clarification from the court. In its most recent ruling, however, the Supreme Court refused to allow any additional time for the companies to pay the bill, holding a DoT official in contempt of court and threatening the executives of the providers with similar punishments for failing to comply with the original October 2019 order. The providers were advised to submit at least a portion of the demanded funds immediately to avoid further action. To that end – and with no sign of any relief from the Supreme Court – the operators submitted an initial tranche of funds: Airtel paid INR100 billion towards its bill of roughly INR356 billion; Vodafone Idea submitted INR25 billion, with an extra INR10 billion to be paid by the end of the week, of a total bill of around INR530 billion; and TTSL paid INR22 billion, which it believes to be the entirety of its outstanding AGR dues, although the government holds that TTSL owes INR138 billion in fees, penalties and interest.

The Supreme Court’s apparent inflexibility with regards to the enforcement of the AGR order has sparked concerns in the nation’s financial sector that the demand may force the collapse of Vodafone Idea; senior officials at the telco have warned on several occasions that it would be forced to close down if the government offered no relief. Looking to assuage concerns, the Reserve Bank of India (RBI) has said that it is ‘very closely monitoring’ the fallout of the crisis and the potential impact on lenders if any of the telcos were to default.

Government ministers, meanwhile, have yet to coordinate their responses to the crisis. Speaking on behalf of the state-owned utility firms that have been issued AGR-related demands by the DoT, oil minister Dharmendra Pradhan asserted that the notices were issued ‘due to some communication gap’ and holds that the public sector undertakings (PSU) are not liable for the dues. The Supreme Court dismissed a petition from the PSUs related to the orders, instructed them to challenge the notices elsewhere. The finance minister, Nirmala Sitharaman, on the other hand said she would hear the telecom ministry’s stance on the matter before making a statement.