DoT seeks clarification from Supreme Court on timeline for AGR payments

3 Feb 2021

India’s Department of Telecommunications (DoT) has reportedly sought clarification from the Supreme Court over a previous ruling on the timeline for payments of Adjusted Gross Revenue (AGR) related dues, the Economic Times writes. The court had previously allowed operators to pay 10% of the dues by 31 March 2021, with the remainder to be paid in equal instalments each year until 31 March 2031. The current disagreement concerns the first payment, with the affected providers – most notably Bharti Airtel and Vodafone Idea (Vi) – arguing that they have already submitted more than 10% of the dues and, as such, are not required to make another payment before the end of the current financial year. On the other hand, the DoT claims that the ruling took the payments made to that date into account, and companies must still pay 10% of their outstanding dues before the end of March 2021.

As noted by TeleGeography’s GlobalComms Database, the dispute over AGR – the figure upon which various licence fees are based – dates back to 1999 but was seemingly brought to a close in October 2019, when the Supreme Court approved the DoT’s broader of definition of AGR, which included revenue from non-telecom sources. The handling of the matter has been a debacle, however, as the apex court responded to requests for clarifications with hostility or dismissed them out of hand. For example, it was never specified whether state-owned companies or non-telcos would be required to pay the fees, resulting in demands for hundreds of billions of rupees being sent to firms that own telecom infrastructure but do not operate as service providers. It took until June 2020 for the Supreme Court to confirm that such companies should not have been included in the ruling. Crucially, though, more than a year on it remains unclear how much is actually owed by the companies covered by the decision, as the court demanded that companies pay sums based on calculations that the DoT admitted were flawed. Airtel and Vi recently appealed that decision, with the former highlighting that, due to the amount of interest and penalties applied to the principal amount (i.e. the outstanding dues based on the new definition) over the last two decades, every INR1 (USD0.01) mistakenly added to the principal amount increases Airtel’s final bill by INR8.