Govt officials meet to discuss relief measures for AGR-hit telecom industry

PTI, Feb 24, 2020, 10:44 AM IST

New Delhi: Senior officials of the telecom department and other key ministries met on Sunday to discuss urgent relief measures that can be extended to the telecom industry, which is battling an unprecedented crisis on account of massive statutory dues it owes the government.

The meeting, held at the Department of Telecom, lasted for over an hour and is said to have deliberated on options before the government to provide a much-needed lifeline to the AGR-hit industry.

Telecom czar and Chairman of Bharti Airtel Sunil Mittal had last week made an appeal to the government for a cut in levies and taxes to pull the sector out of what he had described as an “unprecedented crisis.”

Telecom department officials remained tight-lipped after a high-level government meeting on Sunday, where officials from NITI Aayog and Finance Ministry are said to have been present.

DoT Secretary Anshu Prakash remained unavailable for comments.

The crucial meeting comes at a time when the telecom companies are staring at Rs 1.47 lakh crore in unpaid dues – Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges.

Of the estimated dues that include interest and penalty for late payments, Airtel and Vodafone Idea owe about 60 per cent.

While Airtel has raised USD 3 billion in last few months and is expected to have sufficient funds to tide over the AGR crisis, Vodafone Idea – that has only paid just seven per cent of its total Rs 53,000 crore statutory dues – remains deeply vulnerable.

The government, meanwhile, is looking to strike a balance between complying with the Supreme Court order on AGR dues, ensuring the health of the sector and safeguarding consumer interest.

Both Mittal and VIL Chairman Kumar Mangalam Birla continued to meet top government functionaries throughout last week to seek prompt measures that would offer a breather to the sector.

A top government official had said recently that attempts are being made to balance the need for the health of the sector, consumer interest while complying with the Supreme Court order on statutory dues.

Although the official had not elaborated, sector watchers had said the statement alludes to the government keen on ensuring adequate competition by retaining the present three-plus-one model of competition (three private players and one public sector company).

The statutory dues arose after the Supreme Court, in October last year, upheld the government’s position on including revenue from non-core businesses in calculating the annual Adjusted Gross Revenue (AGR) of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.

The Supreme Court earlier this month rejected a plea by mobile carriers such as Bharti Airtel and Vodafone Idea Ltd for extension in the payment schedule and asked all of them to deposit an estimated Rs 1.47 lakh crore in past dues for spectrum and licences.

It threatened to initiate contempt proceedings against top executives of these firms for non-payment.

Some telecom firms are already struggling with mounting losses and debt and the additional liability has raised concerns of them defaulting on existing loans.

Vodafone Idea has so far paid only Rs 3,500 crore in two tranches. Airtel has paid Rs 10,000 crore out of its estimated liability of over Rs 35,000 crore. Tata Teleservices has paid Rs 2,197 crore, the entire outstanding it believes to have arisen after the October ruling of the apex court for calculating dues.