Airtel 'disappointed' with SC verdict on AGR, mulls curative petition

Yolanda Curtis
January 17, 2020

A bench of Justices Arun Mishra, S Abdul Nazeer and M R Shah dismissed the review petitions filed by Bharti Airtel, Vodafone Idea, Tata Teleservices and other companies after examining their plea in chamber.

The government has estimated Vodafone Idea's dues in the AGR matter to be more than Rs 53,000 crore, including over Rs 28,000 crore in licence fee, interest and penalties and the rest on spectrum usage charges (SUC).

It was followed by SBI (Rs 493.97 crore), RIL (Rs 368.12 crore), IndusInd Bank (Rs 360.26 crore), TCS (Rs 115.70 crore), Bharti Infratel (Rs 107.59 crore), YES Bank (Rs 98.85 crore), ICICI Bank (Rs 98.54 crore), HDFC Bank (Rs 80.92 crore) and Axis Bank (Rs 79.57 crore). The apex court had on October 24 ruled that the statutory dues need to be calculated by including non-telecom revenues in what is known as adjusted gross revenues (AGR) of telcos.

"The immediate course of action for the company is to file for an extension of timeline, which is now a week away, so that the company may find routes to raise the money and have some time to think the future course of action", a person familiar with the company's plan told ET.

An Airtel spokesperson said the company was disappointed with the verdict and was evaluating whether to file a curative petition.

An email query sent to Vodafone Idea remained unanswered till press time. Nearly all telecom operators - Airtel, Vodafone, Idea, RCoM, Aircel, BSNL and MTNL - will feel the pinch of the apex court verdict. Vodafone Idea Chairman Kumar Mangalam Birla has said the telco would shut shop without the government's help. It does not make sense to put good money after bad...

While Vodafone's local unit announced its merger with Birla's Idea Cellular 2017, Aircel Ltd. and tycoon Anil Ambani's Reliance Communications Ltd. slipped into bankruptcy a year ago. Read had called the situation "critical, if you don't get the remedies being suggested". Reliance Industries Ltd., the flagship company of the group that includes the unlisted telecom unit, rose 2%.

Though Bharti Infratel plunged 13 percent on the BSE in the early trade, it managed to recover the early losses to some extent and was trading at Rs 225.55 a share, down 17.50 or 7.21 percent in the late morning trade.

Vodafone Idea pared losses in Mumbai after dropping as much as 39% earlier today.

While Airtel has dues of over ₹35,500 crore, Vodafone Idea needs to pay more than ₹53,000 crore.

The company which along with Bharti Airtel has been knocking at the government's door for a relief package for the telecom sector, which has seen a degrowth in its revenue owing to the intense price war unleashed after the entry of Reliance Jio Infocomm.

According to industry sources, while Vodafone Idea may have to shell out as much as Rs 53,000 crore, Bharti Airtel will have to pay almost Rs 35,590 crore. It had expressed doubts about continuing as a going concern if made to pay the entire AGR due amount. The company had then said it can't comment on the correctness and completeness of the figure. They have to pay pending AGR dues to the Department of Telecommunications by January 23. The telecom companies had sought an open court hearing on their review petition but the Supreme Court chose to stick to its convention of doing an in-chamber hearing.

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