With the Supreme Court rejecting a review of its order that put Rs 1.47 trillion liability of past dues on telecom firms, the two incumbents -- Vodafone Idea and Bharti Airtel -- would be particulary affected, Fitch Ratings said on Tuesday.
The apex court's ruling will also have significant repercussions for India's banking sector as well as the country's broader economic outlook, it added.
"The Indian Supreme Court's rejection on 16 January of a review petition against its earlier ruling in a long-running telecommunications sector tax case, is credit negative for the industry. Two incumbents, Vodafone Idea Limited and Bharti Airtel Limited (BBB-/Rating Watch Negative), will be particularly affected," Fitch Ratings said in a statement.
The Supreme Court last week dismissed review petitions filed by telecom companies against its October 24, 2019 order that asked for inclusion of non-telecom revenues for calculating statutory dues such as license fee and spectrum usage charge.
"The court's rulings in this case could also have significant repercussions for India's banking sector, as well as the country's broader economic outlook," the rating agency said.
The apex court's decision to reject the review petition is likely to lead the Department of Telecommunications (DOT) to demand that telcos pay unpaid dues on licence fees and spectrum usage charges by January 23, Fitch Ratings said.