Sunday, 01 November 2020

Confusion over 10% AGR payment deadlines for Indian telcos

by Harry Baldock, Total Telecom
Tuesday 22 September 20

The Supreme Court extended the payment terms for the telcos adjusted gross revenue (AGR) dues to span 10 years, but just how long do the operators have to make their first payment?

At the start of the month, India’s Bharti Airtel and Vodafone Idea breathed a sigh of relief after the Supreme Court relented, allowing them a decade to pay off their AGR dues, which total billions of dollars.   But…

At the start of the month, India’s Bharti Airtel and Vodafone Idea breathed a sigh of relief after the Supreme Court relented, allowing them a decade to pay off their AGR dues, which total billions of dollars.
 
But, as has become so common with this crucial case for the Indian telecoms sector, the devil is in the detail.
 
The Supreme Court ordered that the telcos should pay 10% of their total AGR dues by March 31st 2021, a move that was met with ready acceptance from Airtel and Idea, who noted that they had paid more than 10% of their total calculated dues already. Ergo the two operators believed they had until March 2022 to make their next instalment.
 
However, the Department of Telecommunications (DoT) thinks differently, arguing that the telcos are required to pay 10% of their remaining total dues, irrespective of previous payments. 
 
“DoT has already raised demand for full AGR dues. The 10 per cent payment to be made by this March will be calculated on total AGR liability,” said one official.
 
Clearly, the definition of 10% in this case requires some clarity, and it is reported that both Vi, Airtel, and the DoT are in contact with lawyers to decipher exactly what the Supreme Court’s decision really entails.
 
If the telcos could avoid paying their first instalment for another year, that would be a huge boon, and could be key in maintaining their position within the national market. Both telcos lag behind run away leader Reliance Jio – who, of course, has no outstanding AGR dues left to pay.
 
 
 
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