NEW DELHI: Offering a ray of hope for India’s beleaguered telcos, the Supreme Court has agreed to hear modification pleas filed by Vodafone Idea, Bharti Airtel and Tata Teleservices seeking room to negotiate with the Centre on a “sustainable payment schedule” for AGR dues running to over Rs 1.47 lakh crore. The issue was mentioned before a bench headed by Chief Justice S A Bobde on Tuesday.
But, while the SC said that it will hear the petitions sometime next week, it did not order any relaxation of the January 23 (Thursday) deadline for making these payments. “It (SC) has given no new directions on the deadline..,” said Shally Bhasin of Agarwal Law Associates, representing Vodafone Idea (VIL).
VIL, Bharti Airtel and Tata Teleservices did not officially comment on Tuesday’s development, but sources requesting anonymity say that VIL “will not pay” the dues on January 23 as it does not have the means to do so. In its petition seeking modification of the SC’s October 24 order directing 15 telcos to shell out thousands of crores in AGR dues, VIL had said that was “in no position to make either upfront payments of the amounts due or provide any financial bank guarantees to securitise the amounts due.”
For its part, Bharti Airtel had argued that it needed more time to calculate dues across 22 telecom circles over the last 15 years which would be a “complex process”.
Adjusted gross revenue (AGR) is the basis on which levies like licence fees and spectrum usage charges (SUC) are calculated and the SC had ruled last year that this should include proceeds from licence-holders’ non-telecom businesses too.
Fifteen telecom firms face an aggregate Rs 1.47 lakh crore bill for pending dues, interest and penalties which they have been ordered to pay by January 23. The most affected by the verdict are VIL, Airtel and Tata Teleservices who face bills for Rs 53,038 crore, Rs 35,586 crore and Rs 13,823 crore respectively.
All three telecom service providers (TSP) have sought SC sanction to negotiate a less onerous payment schedule with the Department of Telecom (DoT). “... have requested the SC to allow the DoT and TSPs to negotiate a payment schedule as TSPs are clearly unable financially to meet the total payment demand,” Rajan Mathews, director general of the Cellular Operators Association of India, had said on Monday.
According to analysts, while Airtel has sufficient liquidity to meet the cash outgo even without relief, VIL will find it a very difficult proposition. “... VIL remains most concerning due to insufficient cash balance and cash flows, and a lack of borrowing capacity to fund these dues,” said JM Financial Analysts in a note last week.
Motilal Oswal Financial Services agrees, noting that even without factoring in the AGR liability, VIL is in trouble. “The company has no source of cash to pay the liabilities and was entirely dependent on payment relief. It has cash merely to continue operations for the next 2-3 quarters,” it said.