Wednesday, 11 December 2019

India's DoT serves telcos with a 3 month payment deadline for $13bn ARG dues

By Chris Kelly, Total Telecom
Thursday 14 November 19

The Department of Telecoms has written to India's network operators advising them that payment of the outstanding dues must be made within three months

India's Department of Telecoms has issued a notice to the country's cash strapped telcos, demanding that they make payment of $13 billion of outstanding dues within three months. Last month, India's Supreme Court upheld a decision that telcos must calculate their Adjusted Gross Revenue (AGR) on their total incomes…

India's Department of Telecoms has issued a notice to the country's cash strapped telcos, demanding that they make payment of $13 billion of outstanding dues within three months.

Last month, India's Supreme Court upheld a decision that telcos must calculate their Adjusted Gross Revenue (AGR) on their total incomes, rather than just revenues derived from the provision of voice and data services. As a result, Indian telcos were left with a bill for over $13 billion. On Wednesday, India's Department of Telecoms put the country's telcos on notice, saying that they had three months to make payment.

"It's the responsibility of the licensee to pay the licence fees and other dues after carrying out their own assessment as prescribed in the licence agreements. You are therefore directed to make the payment in accordance with the order of the Supreme Court of October 24 and submit the requisite documents to ensure compliance within the stipulated timeframe," a letter issued to the country's telcos said.

As recently as yesterday, the CEO of Vodafone Group, Nick Read, called on the Indian government to deliver a significant relief package to the company's ailing Indian JV, Vodafone Idea. Reid said that as part of the relief package, he hoped that the Department of Telecoms would waive the fees and penalties accrued by Vodafone Idea on their AGR payments. He also asked for a 10-year payment plan for the principal amount incurred.

"Regarding the AGR case, we are asking for the waiving of fees and penalties and to be able to spread the principle over a ten-year period. By the way, its worth noting to give you an order of the magnitude involved – when the ruling came out, [Indian telcos] were ordered to pay $13 billion. That number will go up when its finalised but the initial figure is $13 billion. Of that amount, $4 billion was Vodafone Idea. Of that $4 billion, only $900 million was the principle – the rest is interest and penalties. That's a huge amount," he said.

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