Telecom dept orders telcos to clear dues by February 14 midnight

Andrew Cummings
February 15, 2020

While a representative of one of the operators confirmed the receipt of this order, it is not clear how many such orders have been sent and what is the exact amount that the operators may need to deposit by February 14 midnight. Overall, these telecom companies owe over INR 1 Tn to DoT.

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.

Vodafone Idea's ability to continue as a going concern is dependent on the positive outcome of the modification application filed in the apex court and the subsequent agreement with DoT for payment in instalments after some moratorium and other reliefs, the company had said on Thursday. Let's wind up the Supreme Court.It is better to leave this country.

"The order dated 23 January stands withdrawn with immediate effect", the DoT said in a separate letter dated 14 February.

The non-telecom companies appear to be off the hook for now as the Supreme Court had dismissed their petitions seeking a review of the October 24 order, fearing that they would have to pay up their dues as well. It also raises questions on the survival of Vodafone Idea and the competition in the Indian market which could see the risk of a duopoly.

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.

Justice Mishra also added that the telecom companies haven't even paid a single penny and the government officer wants a stay on the order.

The Supreme Court threatened to start contempt proceedings against DoT and the telecom companies that had failed to comply with its orders. The British telecom major holds 45.39 per cent stake in VIL.

Shares of Vodafone Idea (VIL) on Friday tumbled almost 19 per cent after the company reported a widening of losses to Rs 6,438.8 crore in the third quarter of 2019-20.

Weeks after the deadline for the spectrum dues payment has passed, Bharti Airtel and Vodafone-Idea have been chasing various legal routes, like review petitions and curative petitions. 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.

Airtel owes almost Rs 35,586 crore, including licence fee and spectrum usage charge, to the government.

"It can't be in anybody's interest if a company as high profile as Vodafone Idea shuts shop", said Mahesh Uppal, director at ComFirst, a telecom consultancy firm.

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