NEW DELHI: The telecom sector has renewed attempts to secure a relief package from the union government with the Cellular Operators Association of India (COAI) writing to the Department of Telecom (DoT) seeking the offset of GST credits against AGR dues and an extended period of time to pay off the rest. It has also sought a floor tariff for telecom services as well as renewed requests to slash levies like license fees and spectrum usage charges. According to official sources, the Digital Communications Commission (DCC) is slated to meet on Friday to consider possible relief measures. However, sources also note that such relief measures will likely be contingent on telecom service providers paying up pending dues as directed by the Supreme Court (SC).
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. “As individual companies are stretching to make as much payment as is possible in a stressed financial situation, the following credit due to us from the government, if adjusted, can help companies meet AGR payment,” wrote COAI director-general Rajan Mathews, seeking the setting off of GST dues.
Vodafone Idea (VIL) has claimed Rs 8,000 crore in GST credits currently lying with the government. The COAI has also requested that a moratorium of three years be provided “followed by a payment tenure of 15 years at a simple interest of 6 per cent”. “The government may consider granting loan equal to the AGR amount at 6 per cent ...” if the dues were to be settled immediately, Mathews added. As for a floor price, Mathews noted that the sector’s average revenue per user was the lowest among comparable economies at just Rs 108-128, compared to China (Rs 504), Brazil (Rs 405) and Russia (Rs 333). “We believe that despite the introduction of a floor price, ARPU in Indian will remain extremely competitive... floor pricing is imperative to ensure the sector is sustainable, and in a position to bear the deferred spectrum and AGR dues, while continuing to invest in world-class networks and services,” Mathews said.
The COAI reiterated requests to reduce license fees to 3 per cent from 8 per cent, SUC by 3 per cent, a GST waiver on sovereign payments and reviewing the need for bank guarantees. Out of the Rs 1.47 lakh crore pending dues, Vodafone Idea, Bharti Airtel and Tata Teleservices owe Rs 53,038 crore, Rs 35,586 crore and Rs 13,823 crore respectively, according to DoT estimates. After the SC pulled up both the government and the telcos for non-compliance with its order to pay up by January 23, Bharti Airtel, Vodafone Idea and the Tata group have paid Rs 10,000 crore, Rs 3,500 crore and Rs 2,197 crore respectively. While Airtel has promised more payments before the next hearing on March 17, VIL has sought relief in order to pay the rest without declaring insolvency. VIL has also written a letter to the DoT seeking relief measures similar to those set out by the COAI.