Source: The Economic Times, Nov 08, 2019
NEW DELHI | MUMBAI: India’s mobile phone companies may be liable to pay around 10% more in dues to the government than previously estimated, following the Supreme Court verdict on adjusted gross revenue (AGR), said government officials with knowledge of the matter. The total dues, pegged at Rs 1.3 lakh crore by the telecom department, could rise further on account of changes to the definition of AGR and the levies having to be calculated for the entire period till date.
That could delay auctions of spectrum even further, considering the precarious financial situation of the sector, people familiar with the matter said, perhaps until late next year. The sale of airwaves, including 5G spectrum, will be conducted this financial year, the government had said earlier. This timeline may be reconsidered, said people with knowledge of the matter.
DoT is recalculating the dues that telcos owe to the government as per the Supreme Court order, which has clarified that all revenue accrued to the licence holder will have to be included while arriving at gross revenue. As per this definition, “the licence fee and spectrum usage charges could rise by 10%,” one of the officials said. This will result in a proportionate rise in the dues of each telco, the official added.
Spectrum Sale unlikely in FY20
The Supreme Court order of October 24 meant that the telcos faced licence fee demands of nearly Rs 92,642 crore, including penalties and interest, as per DoT’s submissions in court in mid-July. Spectrum usage charge (SUC) demands totalled nearly Rs 41,000 crore, also including interest and penalties. The Supreme Court has given a three-month deadline for the payments to be made.
Vodafone Idea and Bharti Airtel are the worst hit, facing demands of more than Rs 39,000 crore and Rs 41,000 crore, respectively, in licence fees and SUC. A10% increase could potentially see this rising to Rs 42,900 crore and Rs 45,100 crore, respectively. Reliance Communications, undergoing bankruptcy resolution, faces a demand of Rs 20,000 crore. Tata Teleservices, which has sold its consumer mobility business to Bharti Airtel, owes Rs 13,000 crore to the government. Reliance Jio Infocomm, which launched services in September 2016, owes around Rs 41 crore.