The genesis of the dispute between the industry and DoT was the definition of AGR, which is the revenue used to calculate the licence fee and spectrum charges paid by telecom companies
to the government. In the October order, the Supreme Court upheld the government definition of AGR, implying non-core revenues such as rent, dividend and interest would also be part of the calculation.
Disappointed with the decision, Bharti Airtel, which is facing an estimated AGR demand of Rs 35,586 crore said it was evaluating filing a curative petition, which is the last judicial resort available for redressing grievances.
“The industry continues to face severe financial stress and the outcome could further erode the viability of the sector as a whole. The industry needs to continue to invest in expanding networks, acquiring spectrum and introducing new technologies like 5G,” Bharti Airtel
Vodafone Idea, which has to pay out a total AGR dues of Rs 53,038 crore said, ‘’the company is exploring further options, including filing of a curative petition.’’
Tata Teleservices, which sold its consumer business to Airtel, has to pay Rs 13,823 crore in AGR dues. Around 15 telcos together need to cough up Rs 1.47 trillion in AGR dues.
The Cellular Operators Association of India (COAI) had in 2005 filed the first case, challenging the government’s definition on calculation of AGR. It had contended that the components of AGR, which that the government was trying to include, were contrary to the Telegraph Act and the recommendations made by the Telecom Regulatory Authority of India (TRAI).
While the industry has already paid 85 per cent of the demand raised by the DoT, the remaining 15 per cent has stayed disputed for a very long time with the mobile companies getting favourable judgments in various legal forums, including Telecom Disputes Settlement and Appellate Tribunal (TDSAT), High Courts and even Supreme Court.
"While we respect the Hon’ble Supreme Court’s order dismissing the industry’s review petition of AGR matter, the telecom sector
is again deeply disappointed,” Rajan S Mathews, Director General, COAI, said.
Mathews said that the added financial pressure on the sector will also adversely impact Prime Ministeri Narendra Modi’s vision of Digital India.
In December, Vodafone Idea
Chairman Kumar Mangalam Birla had said his company will have to “shut shop" if there was no relief from the government following the Supreme Court ruling requiring it to pay statutory dues of Rs 40,000 crore to the DoT.
reported a net loss of Rs 50,922 crore, the biggest ever in corporate India’s history, due to outstanding payment related to AGR.
posted a net loss of Rs 23,044 crore for the quarter ended September 30, on Rs 28,450 crore provisions towards AGR dues. In November, the government offered Rs 42,000 crore in relief to Bharti Airtel, Vodafone Idea and Reliance Jio by unveiling a two-year moratorium on the yearly instalments they have to pay for spectrum they bought in auction.