Supreme Court Asks Why Jio Shouldn’t Be Paying AGR Dues for Using Spectrum of RCom

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AGR (Adjusted Gross Revenue) dues have become a major pain for the telecom industry of India. It has affected not only the operators that are actively providing telecom services, but also the operators which have gone insolvent. Back on October 24, 2019, the Supreme Court had ruled in favour of the Department of Telecommunications (DoT) and held its definition of AGR dues above what telcos were demanding. Telecom companies in India did not feel liable to pay AGR on the revenue they earned from non-telecom services. But SC sided with DoT. The apex court did recognise that revenue from the sale of assets and insurance claims won’t be considered when calculating AGR dues. Also, SC is not going to entertain the demand of telcos for recalculating the dues but will only consider a decision for the length of the period it has to be paid in. The apex court recognised that the insolvent telcos of India have over Rs 40,000 crore in AGR dues. Read below all the updates that took place today regarding the matter.

SC Wants to Know Who is Using Spectrum of Insolvent Companies

Justice Arun Mishra led SC bench started with hearing the RCom’s case which owes around Rs 25,000 crore in AGR dues. There was Harsh Salve representing SBI. SBI made its position clear by saying that it recognises the spectrum as an asset of the telco. SBI also said that the Committee of Creditors (COC) gets full autonomy on deciding which party gets how much and said that the operational creditors such as DoT can’t be paid at par with financial creditors.

SC then asked RCom if Jio had been using its spectrum and if the answer is yes, then from how long? Against SC’s question relating to Jio, Shyam Divan, Resolution Profession of RCom said that the company has an asset sharing contractual agreement with Jio which DoT has already been notified about and the spectrum fee has also been paid. Divan also revealed the date of the agreement with Jio which was in 2016 for 800 MHz spectrum. Divan also noted that Ericsson has come to terms with setting for Rs 550 crore against its liability of Rs 1,500 crore under Section 9 for insolvency.

To this SC observed that why should Jio be left out from paying the AGR dues for the RCom spectrum it has been using. Justice Mishra said that the party which has been using the spectrum should be liable to pay the AGR dues.

Jio replied that it has only followed the guidelines for spectrum sharing. The guidelines say that when the spectrum is shared, the other party only needs to pay the spectrum usage charges which Jio has already paid and all the AGR dues have been sought with DoT. SC then asked for all the spectrum sharing agreements which include insolvent companies so that it can be known that who is using the spectrum of insolvent companies.

The apex court then adjourned the hearing guiding Jio, RCom Resolution Professional, and the government to produce all the necessary documents which clearly state who is liable to pay the AGR dues. The next hearing will take place at 3 PM on Monday.

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