Government Asks Telcos to Stick to Payment Deadlines for AGR Dues

DoT has sent a letter to the telecom companies asking them to calculate their AGR dues and to stick to the payment timelines

Highlights
  • The telecom companies have to pay dues on non-core revenue as well
  • The total dues on telecom companies is around Rs 1.4 lakh crore
  • Non-telecom companies like GAIL, RailTel, Power Grid also have to pay these dues

The telecom industry remains under a new burden of dues worth Rs 1.4 lakh crore, and above and in a new intimation by the government, the telecom operators have been warned about delays in the payment of the AGR dues. The government has also urged the telecom operators to clear any doubts regarding the dues before December 13 that may not have been covered in the recent Supreme Court decision declared in October. The Department of Telecommunications (DoT) has also asked the telecom companies to speedily calculate their AGR dues which they are required to pay, as per the new ET report. The telecom companies also have to self-asses their AGR dues. As for the payments, which have been calculated by the government, around 15 telecom operators have to pay around Rs 1.47 lakh crore in the name of AGR dues, whereas in the case of non-telecom companies which in total hold around 3,500 licenses, the companies have to pay Rs 2.8 lakh crore to the government.

government-telcos-payment-deadlines-agr

Govt Issues Letter to Telecom and Non-Telecom Companies

Following the decision by the Supreme Court, the government has now issued a separate letter to the telecom companies asking them to hurry up on the process of dues assessment. As per the Supreme Court order which was passed on October 24, the telecom companies have three months from the date of the order to pay up these dues. The letter from the government says, “Any issues should be pointed out in the comprehensive representation to be submitted, but in no case, the self-assessment and payment of dues are to be delayed.” The letter further asked the companies to submit a “comprehensive representation” in a week’s time or latest by December 13.

To recall, on October 24, the Supreme Court had gone with the definition of AGR, which was supported by the government. After the decision, the Adjusted Gross Revenue (AGR) of the telecom companies also have to include non-core services as well. After the announcement of this verdict, the government had asked the companies in question to calculate their dues and submit it to the DoT.

Non-Telecom Companies Also to Pay Dues

It is also worth noting that non-telecom companies which hold telecom licenses and include names like GAIL, RailTel, Power Grid and others also have to pay these dues to the DoT. On the other hand, the ISPs have asked for some intervention from the Prime Minister’s Office (PMO) on the matter to resolve the issue.

A letter from DoT on this matter said, “In this regard, it is pointed out that over the course of time, multiple representations related to LF (licence fee) assessments were received from various licensees for consideration by the department.”

Bharti Airtel and Vodafone Idea in Worst Situation

Out of all the companies that are liable to pay dues on the AGR, the telecom operators, Bharti Airtel and Vodafone Idea are in the worst position. These two telecom operators combined have to pay more than Rs 90,000 crore to the DoT. While Vodafone Idea has to pay around Rs 53,000 crore, Bharti Airtel has to pay dues around Rs 35,500 crore. Both Bharti Airtel and Vodafone Idea have sought a review of these dues by filing a review petition in the Supreme Court. These telcos have also asked for some statement from the Supreme Court on the quantum of these dues. The companies are actively seeking for relief from the government and Vodafone Idea has even said that it would wrap up operations if the relief does not come from the government. Whereas, Bharti Airtel has already made up plans to raise $3 billion through equity and debt.

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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bharat khannaKiran Fernandes | GoaAniruddha DharKunalNature lover Recent comment authors
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Kunal
Kunal

Check Airtel current market valuation of various business in attachment.

Even the African business is valued over 15000 crores.

Airtel saved agr money & invested in Africa.

Airtel Africa is all 2g profit money.

Screenshot_2019-12-10-22-48-45-58.png
Kiran Fernandes | Goa
Kiran Fernandes | Goa

Airtel will be able to pay the AGR, but not Vodafone Idea. They’re gonna get hit really hard. It remains to be seen how they’re gonna work it out.

After the AGR is paid, the government will announce the date of the spectrum auctions. This looks like Jio’s plan all along. Ambani is the smartest businessman ever.

Kunal
Kunal

Airtel is professionally managed company. They have diversified & grown through the years & have now multiple companies which all are related to core telecom business. They can sell stake in some non core business & easily pay off the AGR money. The above valuations are on current market price , which are after they raised around 69000 crores in the last few years to fend off Jio on slaught. Analysts are positive about Airtel future , which are seen in their share price jump . On the other hand , both voda & idea too have had a honeymoon… Read more »

Kiran Fernandes | Goa
Kiran Fernandes | Goa

yeah I know what you’re talking about. But I didn’t know about Birla having a monopoly in cement. Thanks for pointing that out. So it’s evident we’re going to a dupoly after AGR payment in Jan end.

bharat khanna
bharat khanna

thats current market evaluation and when they bought it from Zain it was much lower

Avinav
Avinav

Make video on CA and CA supported handsets.

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