Airtel, Vodafone Idea Refuse to Provide Bank Guarantees Against AGR Dues; SC Asks Them to Provide Balance Sheets

Airtel also said that it was fully willing to pay whatever amounts are required to be paid in accordance with the Judgment

airtel-vodafone-idea-refuse-provide-bank-guarantees

The Supreme Court has ordered the telcos like Bharti Airtel and Vodafone to file their audited balance sheets of the past 10 years after telcos refused to provide additional bank guarantees and security against AGR-related payments. The Court said that the next hearing will take place in the third week of July.

The Court has also directed these telcos to come up with payment proposals and asked the Department of Telecommunications to consider them.

Bharti Airtel, in its affidavit, to Supreme Court requested for staggered AGR payments over the period of 20 years and said that it will enable the Bharti Companies to ensure that they also continue to make capital expenditures to support the vision of digital India and allow the customers to have a choice of competing players to deliver services.

Airtel also said that it was fully willing to pay whatever amounts are required to be paid in accordance with the Judgment.

Vodafone Idea, on the other hand, said that it has not made profits for several quarters, and has no funds to make payments towards the AGR-related dues. The telco’s representative lawyer Mukul Rohatgi said that it has not such a proposal for bank guarantees.

Ailing telco Vodafone Idea has also warned that it will “go bust” if it is made to pay AGR dues in one shot. The telco has already paid nearly Rs 7,000 crore and had informed the Court that its licenses and spectrum can be used as security against AGR dues.

The telecom department has sought over Rs58,000 crore from Vodafone Idea.

The Court has also noted that the telecom department has withdrawn 96% of the over Rs 4 lakh crore claims levied against PSUs such as GAIL and Oil India. Airtel, in its affidavit to the Supreme Court, said that that the Bharti Group companies have paid a substantial amount of Rs.18,004 crores so far in compliance with the judgment dated October 24, 2019. “..To that end they have paid a substantial amount of Rs.18,004 crores (Rs. 10,000 crores on 17.02.2020 and a further sum of Rs. 8004 crores on 29.02.2020) to the DoT,” Airtel said in its affidavit.

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Prithvi

This is a cat and mouse game being played. The telcos are playing it very safe and so is the Indian Govt. I hope better commercial sense prevails and all three players get their footing in the market.

Arun

I think the crisis is almost over. Vodafone will make a token payment and get 20 years to pay the balance. Plus the promoters will infuse money once the Trai set minimum floor price. Hopefully we can find three strong players!

Kiran Fernandes | Goa

Doubt it. Vodafone is looking for an easy way out. Looking at the current scenario, it’s evident they’ll be gone soon.

Nikhil

I doubt Vodafone-Idea will infuse any money in near future. They will return the spectrum in non-flagship circles and will become regional operator IN India.

SACHIN

strong possiblity

Chetan

Nikhil, Returning spectrum is not an option. DOT doesn’t take back auctioned spectrum.
THey may sell it to Jio or Airtel if possible.

Nikhil

@Chetan : Whatever you said is true, but they will get enough money by selling huge spectrum assets in 15 circles where they are performing ordinarily even after years and this so called integration. They will get huge money as both Airtel and Jio needs spectrum. Airtel not much if three player stays in market. But Airtel will be needing spectrum to stay in competition and can become cut throat competitor to Jio where VIL is not so good. If VIL dies completely, Airtel needs to step up its game by buying 700Mhz game to stay in advantage. Right now,… Read more »

Nikhil

@Chetan : Total number of subscribers is also falling short. So tariff hike doesn’t matter. With no network quality compared to Jio and Airtel Post upcoming auction, VIL will be left with almost half the customers with less than 200 ARPU. That will force them to layoff more employees.

Chetan

Yes as i said earlier, VIL will somehow survive AGR verdict. BUT BUT…. when i visualize VIL after 1 yr, then picture is hazy. Whatever money VIL will earn from tariff hikes will go towards AGR and spectrum payments every yr. Or might fall short as they increase tariff to save from Dire straits they may lose subscriber eventually since no money is infused to improve user experience . So ARPU and EBITA will come down.. While Jio and AIrtel will infuse money raised from Tariff hikes into networks/spectrum thereby increasing QOS. So Future is dark for VIL for sure… Read more »

saket

Justise rightly said, VIL is foreign company unlike reliance and tata. Airtel also got recently more eqity fron singtel.

VIL may leave assets and leave, as Vodafone plc has already amde investment value as zero. so Govt and DOT will be standed with assets/ spectrum/unpaid dues and FRUSTATED customer to PORT out.

let VIL made some down payment of 10000 crores to match airtel 18000 crores. secondly Income tax refund and any existing extra BG can be adjusted for soft loan for 3 years only. and let VIL strat digging its own grave.

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