Bharti Airtel Review Petition in SC Rejected, Telco Thinking of Filing Curative Petition

Bharti Airtel has received a rejection on the review petition which it filed in the Supreme Court for reviewing the AGR decision given on October 24, 2019

Highlights
  • Now Bharti Airtel is thinking of filing a curative petition
  • The total dues for Bharti Airtel are Rs 35,500 crore
  • Vodafone Idea has dues of Rs 53,000 crore

The biggest trouble for the telecom sector at this point of time happens to be the Adjusted Gross Revenue (AGR) dues which the companies have to pay in the matter of a few days. The AGR dues deadline, as given by the Supreme Court is January 23, and the telecom companies are reluctant to pay these dues because of the extreme financial crunch which the telecom sector is facing right now. To seek some relief from the Supreme Court, both Vodafone Idea and Bharti Airtel had filed separate review petitions. But, it seems that the attempt of the telecom companies has gone in vain as the SC has rejected the review petition of the telecom companies. The AGR dues in total for the two telecom companies reach as high as Rs 90,000 crore, and for the telecom industry in total, they are north of Rs 1.47 lakh crore. To recall, the decision was passed by the Supreme Court on October 24, saying that the telecom operators have to pay the spectrum usage charges, license fees, interests, penalties and the interest on those penalties based on the new AGR definition before January 23, 2020.

bharti-airtel-review-petition-rejected

Bharti Airtel Thinking to File Curative Petition

This new move has not been taken well by the telecom companies, Bharti Airtel and Vodafone Idea. While there has been no major reply from Vodafone Idea, Bharti Airtel has said that it is ideating on filing a curative petition. “While respecting the Hon’ble Supreme Court’s decision, we would like to express our disappointment as we believe the long-standing disputes raised regarding the AGR definition were bonafide and genuine. 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. The money now required to pay punitive interest, penalty and interest on the penalty, which forms nearly 75% of AGR dues would have better served the digital mission of the country. We are evaluating filing a curative petition.”

COAI Also Shows Disappointment

Director of Cellular Operators Association of India (COAI), Rajan Matthews, which represents major telecom companies said, “The sector, which is currently reeling under a debt of INR 4 lakh crore, is a key contributor to the Indian economy in terms of consumer benefit, employment, revenue generation and contributes 6.5% to the GDP. The sector is already facing heavy taxes & levies in the range of 29% to 32%, which are globally the highest. The Supreme Court’s dismissal of the review petition is the last straw in contributing to financial distress, and it remains to be seen whether the industry will be able to recover from this setback. This added financial pressure on the sector will also adversely impact Hon’ble Prime Minister, Shri Narendra Modi’s vision of Digital India.”

Vodafone Idea Might Shut Shop

Vodafone Idea, Chairman, Kumar Mangalam Birla has already said that Vodafone Idea might have to shut shop if no relief comes from the government in terms of AGR dues. The only relief that the telecom companies have received till now is the two-year payment of moratorium for Rs 42,000 crore. Also, there has been no tax relief for the telecom companies, meaning that until now there has been no major relief. The payment moratorium will also only ease the balance sheet and not really make much of a difference.

AGR Now Includes Non-Core Items

In December month, the telecom companies also increased their tariffs by as much as 40% to help their revenue, but even that will be of little help given the quantum of dues. While Vodafone Idea has to pay Rs 53,000 crore in AGR dues, Bharti Airtel has to pay a total of Rs 35,500 crore in AGR dues. The decision from Supreme Court came in favour of DoT, as the SC said that the calculation of AGR would also include the non-core items as well and not only core telecom services. Since then, the telecom companies have been in distress and are finding ways in which they can pay off the dues or seek relief in the matter. Since the decision has come from the Supreme Court, the review petition was one of the ways relief could have come in telcos’ way.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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RAM

Let Vodafone Idea, Airtel shut shop and BSNL with 2G only in era of 5G so let Ambani’s Jio only make money with open relief from Modi ?…This is open truth for BJP funds from Reliance Industries.

City
India
Operator
Mobile
DTH
Tata sky
SACHIN

dont coock Khayali Pulav …..why airtl bsnl blane on jio.last 20 year they suck our money and dont imprv netwrk still airtl has lowest indoor 4g and bsnl has very low 4g .though opertng frm 20 year.

Ashish

Because every decision in bsnl has to be made by govt approval. Congress wanted to benefit avoid Modi want to benefit Jio

Kunal

Bsnl itself has to be blamed for the mess. They are so over weight due to over staff & union protection. Non accountability of staff & job security . Total improper management . No top officials could perform as unions threatened them . Nobody would risk life . Even the small level employees want to perform, but as there is no management . It would get wasted. Only fit can survive in competition. With the transformation from old monopoly landline days to mobile , they had to reduce their staff & other overheads accordingly , which did not happen. Simply… Read more »

Karthik

Negative impact on OLD operators. QOS policy has been a big gain for JIO. When QOS is same with all operators , customer will choose a service which is cheap in price.

There are 2 reasons for WIN

1. Good performance by a winning team(Struggling for victory)
2. Worst(Not bad or poor) performance by an opposite team.(easy victory)

With respect to JIO , they are in an winning mode because of 2nd point (Poor performance by old operators),

bharat khanna

Well Now a days only price is what matters! Because at-least in metros QoS was good, now it is not by ANY provider

Kunal

Government never stopped avoid to pay agr dues when the claims were initially raised. The Matter started more then 12 years back . It was the UPA government in power which dragged the Telcos rightly to the court. Avoid did challenge the government claim in court but should have paid agr dues immediately under protest to save on interest & penalty which are almost three times of basic amount. If the case would have been in favour of avoid , they would have got refund with interest from government. From Day one , government has been claiming money with interest… Read more »

saket

100% agree. today i am expecting SC should not give any favour, otherwise This will have ripple effct on every other Case reaching SC, and every other industry will seek modification via review petition.

in short
1. Paying hefty sum by delayin DIGITAL INDIA/Delayed 5G investment is less harmful
2. Undoing SC judgement by waiving of Interest/penalty and extending timeline to comfortable level.

KRISH

Govt want to revive BSNL and to make it successful it is necessary to kill Vodafone. No developed country has 4th player that makes profit. So, it seems everything just going as per plan.

City
Burdwan
Operator
Jio, BSNL
Karthik

But GOI has to be fully dedicated in improving financial situation of BSNL if VOdafoneIDea really exit INDIAN telecom. Duopoly(When BSNL was just one of the player just for name sake) in any industry is more poisonous than Monopoly when the two operators are like Cat and mouse. Monopoly kills competition, But Duopoly kills entire telecom sector.

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