DoT issues SCN to Vi over licence fees, clashes with Airtel over Videocon’s AGR dues

9 Apr 2021

India’s Department of Telecommunications (DoT) has issued a show cause notice (SCN) to Vodafone Idea (Vi) for non-payment of licence fees for seven areas, the Economic Times writes. The dues relate to the operator’s licence fee for the fourth quarter of the financial year to 31 March 2021 for the Bihar, Gujarat, Jammu and Kashmir, Kerala, Maharashtra, Uttar Pradesh East and Orissa circles.

In a similar development, Bharti Airtel has reportedly refused to pay the Adjusted Gross Revenue (AGR) dues of defunct operator Videocon, from which Airtel purchased 1800MHz band spectrum in six circles in 2016. The dues relate to unpaid spectrum usage charges and licence fees, which are based on the licensee’s AGR. As previously reported by TeleGeography’s CommsUpdate, as part of the resolution of a long-standing dispute between operators and the DoT over the definition of AGR in October 2019, the DoT issued demands of around INR1.5 trillion (USD19.7 billion) for over a decade’s worth of unpaid fees, plus interest and penalties. In a filing with the Supreme Court, the DoT explained that it had issued demands of INR13.76 billion to Airtel in September 2020 and February 2021 in relation to Videocon’s fees, but the cellco had declined to pay. Airtel argues that there is ‘no basis in law’ for it to be held responsible for Videocon’s past dues, and highlighted the fact that the DoT had not raised the demand earlier as ‘ample testimony to the fact that that Airtel is not liable for any outstanding dues of Videocon’.

Meanwhile, state-owned operators Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) have not paid their AGR dues, the Economic Times cites an unnamed official source as saying. It remains unclear whether the duo are liable for the payments, however. BSNL and MTNL were not part of the October 2019 case, but were named by the DoT on a list of companies from which dues were to be recovered. Mishandling of the case by the DoT and the apex court led the DoT to issue demands to a number of public sector undertakings (PSUs – i.e. government-owned entities) that it was later determined were not liable for the dues. These were typically utility or transport firms that held licences to operate telecom infrastructure but were not principally telecom operators. The Supreme Court’s decision on the matter did not make it clear, though, whether BSNL and MTNL should be required to pay. According to the DoT, BSNL owes INR58.35 billion and MTNL INR43.52 billion, based on dues up to the 2016/2017 financial year.