NEW DELHI: The DoT on Thursday decided not to take any coercive action against the companies that haven't cleared AGR dues until the Supreme Court (SC) weighs in on the modification petition, sources said.
Even though the deadline for payment of pending AGR dues ended on Thursday, neither Vodafone Idea (VIL) nor Bharti Airtel made the payments. Both of them have also asked the government to wait for the Supreme Court's orders before taking any action. The apex court has agreed to hear their petitions seeking more time to make the payments next week.
Earlier this week, Airtel, VIL and Tata Teleservices had sought its permission to negotiate a sustainable payment schedule with the government.
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 the licence-holders’ non-telecom businesses too.
The decision impacts over 15 telecom firms, both current and defunct, but those with the highest liabilities are VIL, Airtel and Tata Teleservices who face bills of Rs 53,038 crore, Rs 35,586 crore and Rs 13,823 crore respectively in pending dues, interest and penalties.
The only firm to have made the payment according to the deadline is Reliance Jio, whose liabilities are a fraction of its rivals' at Rs 190-odd crore.
While neither Airtel or VIL commented, Cellular Operators Association of India director general Rajan Mathews confirmed the development. "Airtel and Vodafone Idea have written letters to the DoT asking them to wait till the SC decides on the modification plea, and we believe the DoT will not seek payment until then. We are asking the DoT to allow a moratorium and a ten-fifteen year period over which to pay the dues," Rajan said.
The SC's decision can mean the difference between survival and an ignominious exit for Vodafone Idea. While analysts say Airtel will be able to foot the bill even in the absence of relief, VIL will find it a difficult task. “...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. "It has cash merely to continue operations for the next 2-3 quarters,” it said.
While the DoT has estimated that all telcos together owe Rs 1.47 lakh crore in pending AGR dues, it has also sent several demand notices to non-telecom firms who hold or held, licences. These include a whopping Rs 1.7 lakh crore demand from GAIL India, over Rs 22,000 crore from Powergrid Corp, Rs 48,000 crore from Oil India Ltd and over Rs 15,000 crore from RailTel.
Oil India consequently filed a modificatory/clarificatory petition with the SC on its AGR order on Wednesday, while GAIL India has reportedly filed a similar petition on Thursday.