Govt must close 'legal disputes' hurting telecom: Sunil Mittal on AGR dues

Sunil Mittal, chairman of Bharti Airtel.
Indian telecom is not “out of the woods” despite proving itself indispensable in the weeks-long lockdown to contain the spread of the coronavirus, said Bharti Airtel chairman Sunil Bharti Mittal on Tuesday, urging the government to "close long-standing legal disputes”.

The Supreme Court rejected on July 20 telecom companies’ demand for re-assessing their dues linked to adjusted gross revenue (AGR) and said it will decide later a government's plea to give the carriers a 20-year staggered payment timeline. The court upheld the amount to be paid by Bharti Airtel at Rs 25,976 crore and by Vodafone Idea at Rs 50,399 crore, factoring in the companies' payments of Rs 18,004 crore and Rs 7,854 crore.

"The company…is of the view that the telecom price-wars changed the landscape of the industry we have known and operated in till date and the Adjusted Gross Revenue (AGR) dues have caused significant distress in business sustainability for industry players," he said.

“The government must also look at rationalising the levies on the sector and close the long-standing legal disputes which are a drag on operators' performance,” Mittal said, apparently referring to the AGR dispute.

"While it’s clear that the worst may be behind for India’s telecom industry, we are yet to emerge from the woods. India still has some of the lowest data tariffs globally and the industry is barely able to cover the cost of capital. It requires much more support to repair the deep damage to its finances and make it viable for telecom operators to invest in future technologies," Mittal said in a message to Airtel shareholders.

"Though the recent tariff increase has provided some cushion to the industry, we are still way below the levels to make the industry viable, said Mittal, 62.

"Given the commendable job it (telecom industry) has done to keep India connected, I hope the Government will look into the urgent needs of the operators."

Airtel’s Annual Report 2019-20 said that despite the coronavirus and lockdowns to contain the disease, the company has held on to its market share.

The company said it raised more than USD 8 billion over the year through rights issue, Airtel Africa IPO, Perpetual Bond, QIP (qualified institutional placement) and FCCB (foreign currency convertible bonds).

"The Indian telecom industry is now at a crucial transformational stage. From multiple players trying to claim shares of the market, now, after extensive consolidations, we have entered a 3+1 player arena. Yet, if our journey till date is any indication, we are confident about holding our ground," said the company’s report.

Bharti Airtel had more than 423 million customers across its operations at the end of March 2020. It owns and operates more than 42,053 telecom towers under its subsidiary Bharti Infratel Limited (on a standalone basis) with presence across all 22 telecom circles.

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