AGR woes: DoT asks telcos to clear dues by midnight after SC rap; withdraws order of no coercive action against defaulting firms

After Supreme Court rap, the telecom department began issuing orders, directing companies such as Bharti Airtel and Vodafone Idea to clear dues before Friday midnight. The DoT, which faced the ire of the Supreme Court for putting on hold recovery of dues from telecom companies, started issuing circle or zone-wise demand notices to firms, an order seen by PTI said. The order issued on Friday by the UP (West) Telecom Circle asked “all telecom service providers” to clear dues by 11.59 pm Friday. “With reference to subject cited above, you are hereby directed to make the payment of outstanding dues of licence fee and spectrum usage charges by 14.02.2020, 11:59 PM positively,” it said.

Telecom Department issues an order to telecom companies to clear #AGR (Adjusted Gross Revenue) dues by Friday, February 14, 11:59 pm@ShereenBhan @AshmitTejKumar @DoT_India pic.twitter.com/ynpyuHtsJv

— CNBC-TV18 (@CNBCTV18Live) February 14, 2020

One of the telecom operators, who did not wish to be named, confirmed the receipt of the said order from the circle.

While in all, 15 entities owe the government Rs 1.47 lakh crore – Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges, it is not immediately clear just how much of that has been sought by the government by midnight tonight.

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The order issued the circle-based Controller of Communication Accounts came after the telecom department earlier on Friday withdrew its order that asked for no coercive action against telecom companies defaulting on statutory dues payment. Earlier in the day, the telecom department has withdrawn its order that asked for no coercive action against telecom companies defaulting on statutory dues payment after the Supreme Court on Friday took a strong view of non-compliance with its order. The order also directs field offices to take “immediate necessary action” in compliance with the October judgment of the Supreme Court. The direction by the DoT says its previous order dated 23 January, 2020 “stands withdrawn with immediate effect”.

Telecom Dept withdraws earlier directions granting protection to telcos from coercive action#telcos #telecom pic.twitter.com/duZdTg9PG9

— CNBC-TV18 (@CNBCTV18Live) February 14, 2020

“It is directed to take immediate necessary action in compliance with the judgement dated 24 October, 2019 of the Supreme Court,” said the fresh order issued by the DoT soon after the apex court made its observations on Friday. The department’s move came after the Supreme Court on Friday directed the managing directors and directors of telcos and other firms to explain why contempt action be not taken against them for non-compliance of its order to pay adjusted gross revenue (AGR) of Rs 1.47 lakh crore to the Department of Telecommunications. Taking strong note of the non-compliance of its order, a bench of Justice Arun Mishra, Justice S Abdul Nazeer and Justice M R Shah expressed anguish over the order passed by DoT’s desk officer, staying the effect of its verdict in AGR matter. Of the three private players operating in the Indian telecom market, Vodafone Idea is considered to be in the most vulnerable position. Vodafone Idea is staring at dues worth Rs 53,000 crore that includes up to Rs 24,729 crore of spectrum dues and another Rs 28,309 crore in licence fee, and the company had earlier warned of shutdown if no relief was given. [caption id=“attachment_5093881” align=“alignleft” width=“380”] Representational image. Reuters[/caption] Vodafone Idea in its earnings statement on Thursday had also sounded out warnings on “material uncertainty” casting “significant doubt” on its ability to continue as a going concern. VIL had said on Thursday that the company’s ability to continue as a going concern is essentially dependent on a positive outcome of its modification application in the Supreme Court on the AGR matter and any relief from the telecom department on payments. Last week, Vodafone Chief Executive Officer Nick Read had said the situation in India is critical, following the AGR ruling of the Supreme Court. The British telecom major holds 45.39 percent stake in VIL. VIL had suffered staggering Rs 50,922 crore loss in the September quarter (highest ever loss posted by any Indian corporate), when it had made provisions for statutory dues following the Supreme Court’s order in the adjusted gross revenue matter, although its losses in December quarter narrowed to Rs 6,439 crore. Rival Bharti Airtel’s liabilities added up to nearly Rs 35,586 crore, including licence fee and spectrum usage charge dues. But, Airtel had already said that the previously-mentioned material uncertainty on the group’s ability to continue as a going concern “no longer exists” after the recent Rs 21,502 crore fund raising by it. Most of the remaining liability is with state-owned BSNL/MTNL and some of the shut/bankrupt telecom companies. (With PTI inputs)