Soon after the strongly worded SC order, the DoT
swung into action, trying to take corrective measures. First, it withdrew its January circular that no coercive action would be taken against telcos for delaying the AGR payment, and then in a se¬¬parate communication, said the firms must submit all their AGR dues by midnight — 11:59 pm on Friday to be specific.
It’s another matter that no telco rushed to meet the midnight deadline announced by the DoT just a few hours earlier on Friday. Bharti issued a statement saying it would pay Rs 10,000 crore by February 20 and the remaining dues before the next SC hearing on March 17. Vodafone Idea, which had earlier said it would be hard to do business in India if the AGR court ruling was not relaxed, remained quiet till the time of going to press.
Sources said the firm was waiting to hear from the UK headquarters of Vodafone on the road ahead. Vodafone Idea, which announced losses of Rs 6,439 crore for the December quarter, put off the post-result earnings call, scheduled for Friday, indefinitely.
Public sector undertakings (PSUs) such as GAIL India, RailTel, PowerGrid and others, with an AGR bill of around Rs 2.65 trillion, have been asked to come separately for a hearing. Bharti Airtel, wanting to make amends, said in a statement that it had agreed to pay Rs 10,000 crore on a “self-assessment” basis to the central government. In a letter, addressed to the Member (Finance) of the DoT, Bharti said, “In compliance with the judgement of the Supreme Court
and their direction today, we shall deposit a sum of Rs 10,000 crore by February 20 on behalf of the Bharti Group companies
(Bharti Airtel, Bharti Hexacom and Telenor India).”
The firm is doing the self-assessment in all 22 circles and has assured the Centre that it would make the balance payments “shortly”. The SC order said if the dues were not paid by the next hearing (March 17), MDs of the telcos would have to be present in court.
Even as Vodafone Idea remained silent on its payment strategy, analysts are of the view that the telecom sector stares at a duopoly with Bharti and Reliance Jio as the two likely private players to remain in fray. Reliance Jio is the only telco to have paid up its AGR dues of around Rs 170 crore by the deadline. “Both the review petition and the modification petition have not been favorable to Vodafone Idea and in our view is pushing India towards a two-player market. That may not be an ideal situation as the networks of Bharti Airtel
and Reliance Jio may not withstand the load of 300 million users,” BOfA Securites said in its report. Banks have a huge exposure to Vodafone Idea debt and there may be a cascading effect, economic impact on GDP and job losses, the report said.
BofA Securities is currently acting as financial adviser to Vodafone Idea in connection with the merger of Indus Towers Limited (in which Idea Cellular Limited has 11.15% equity stake) with Bharti Infratel Limited.
The top court had on October 24 upheld the DoT definition of AGR that meant all revenue accrued to carriers, including that from non-core activities, must be taken into account, giving a fresh twist to the nearly two-decade old case.