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The Supreme Court on Tuesday asked Department of Telecommunication (DoT) not to invoke bank guarantee given by Bharti <keyword id="15491" type="General" weightage="20" keywordseo="airtel" source="Orion">Airtel</keyword> for a period of three weeks for not clearing Videocon Telecommunications Ltd's adjusted gross revenue (AGR) dues of over Rs 1,300 crore. A bench headed by Justices L. Nageswara Rao and comprising Justices S. Abdul Nazeer and M. R. Shah declined to entertain Airtel's plea challenging the DoT demand, but it allowed the telecom firm to approach the appropriate forum against the government decision. Senior advocate Shyam Divan, representing Bharti Airtel, argued that his client received a communication on August 17, saying the firm must make payment and if it fails to do so, then there is a possibility of invoking various bank guarantees. He contended that Rs 18,000 crore dues have already been paid by the telecom company, according to the top court's order and there is another figure, which is attributed to Videocon Telecommunications. He added that there is a particular spectrum traded by Videocon to Airtel and citing the spectrum trading guidelines, he added the seller shall clear all dues prior to concluding any agreement for spectrum trading. "The liability is of Videocon... full liability of the seller," submitted Divan. Divan argued that by adding the dues of Videocon to the demand made from Airtel, the DoT has violated the apex court's order that AGR dues cannot be recalculated or reassessed. The top court said it will not interfere with its order, rather it will grant liberty to Airtel to move any other alternate forum to redress its grievances. Divan said that the alternate forum will be the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). Earlier this year, in an affidavit filed before the Supreme Court on the status of statutory dues paid by telecom operators, the DoT said it is planning to slap Videocon Telecommunications Ltd's AGR dues over Rs 1,300 crore on Bharti Airtel. Videocon Telecommunications had sold spectrum of 30 MHz to Bharti Airtel in 2016. Concluding the hearing, the top court allowed Airtel to withdraw the application and also restrained the DoT from invoking its bank guarantees for 3 weeks. According to the Centre's calculations, the total AGR liability of Bharti Airtel is Rs 43,980 crore, Vodafone Idea's is Rs 58,254 crore, Tata group's is Rs 16,798 crore, BSNL owes Rs 5,835.85 crore, and MTNL Rs 4,352.09 crore. SEE ALSO: <a href="https://www.businessinsider.in/business/telecom/news/airtel-added-5-million-new-4g-users-tariff-hike-hopes-and-record-broadband-customer-addition-surge-share-price/articleshow/85039298.cms">Five million new 4G users, tariff hike hopes and record broadband customer addition send Airtel's stock to a 6-month high</a> <a href="https://www.businessinsider.in/business/telecom/news/the-enormous-gap-between-vodafone-idea-on-one-hand-airtel-and-jio-on-the-other/articleshow/85035781.cms">The enormous gap between Vodafone Idea on one hand, Airtel and Jio on the other</a> <a href="https://www.businessinsider.in/business/telecom/news/vodafone-idea-loses-over-4-million-subscribers-airtel-and-jio-add-over-9-million-in-june/articleshow/85589113.cms">Vodafone Idea loses over 4 million subscribers, Airtel and Jio add over 9 million in June</a>

AGR case: Supreme Court directs DoT not to enchash Airtel's bank guarantees for three weeks

New Delhi, Feb 13 () The Supreme Court will on Friday hear fresh pleas of telecom firms, including Bharti Airtel, Vodafone Idea and Tata Teleservices, seeking a new schedule of payment of statutory dues to the tune of Rs 1.47 lakh crore to the Department of Telecommunications.A bench of justices Arun Mishra, S Abdul Nazeer and M R Shah will hear a batch of petitions filed by telecom companies in open court. The pleas filed by Vodafone Idea, Bharti Airtel, and Tata Teleservices has sought more time for payment of adjusted gross revenue (AGR) related dues. The telecom companies want to negotiate a fresh payment schedule with the Department of Telecommunications (DoT), which has issued demand notices to them.Earlier on January 16, a bench headed by Justice Arun Mishra had dismissed review petitions of telecom firms seeking review of its earlier order asking them to pay Rs 1.47 lakh crore in statutory dues by January 23, saying it did not find any "justifiable reason" to entertain them.The apex court had on October 24 last year ruled that the statutory dues need to be calculated by including non-telecom revenues in AGR of telcos.It had upheld the AGR definition formulated by the DoT and termed as "frivolous" the nature of objections raised by the telecom service providers.In an affidavit filed in the top court, DoT said that according to calculations, Airtel owes Rs 21,682.13 crore as licence fee to the government and dues from Vodafone totalled Rs 19,823.71 crore, while Reliance Communications owed a total of Rs 16,456.47 crore. BSNL owed Rs 2,098.72 crore and MTNL Rs 2,537.48 crore."The definition of gross revenue is crystal clear in the agreement. How the adjusted gross revenue to be arrived at is also evident. It cannot be submitted that the revenue has not been defined in the contract. Once the gross revenue is defined, one cannot depart from it and the very meaning is to be given to the revenue for the agreement," the apex court had said in its October verdict.According to the New Telecom Policy 1999, telecom licensees are required to share a percentage of their AGR with the government as annual licence fee (LF).The 1999 policy came after operators made representation to Centre for relief against steep licence fee which they had consistently defaulted since 1994 and an option to licensees to migrate from fixed licence fee to revenue sharing fee was made applicable in the year 1999. In addition, mobile telephone operators were also required to pay spectrum usage charges (SUC) for use of radio frequency spectrum allotted to them.Telecos had moved the top court against the Telecom Disputes Settlement and Appellate Tribunal's (TDSAT) order which ruled that certain non-telecom revenues like rent, profit on sale of fixed assets, dividend and treasury income would not be counted as AGR on which licence fee would have to be paid to government.The TDSAT had exempted a large number of streams from the definition of AGR, like capital receipts, bad debt, distribution margins to dealers, forex fluctuations, sale of scrap and waiver of late fee. It had also said revenue from non-core sources such as rent, profit on sale of fixed assets, dividend, interest and miscellaneous income must be included while computing a carrier's AGR, dealing a setback to telecos who would have to shell out more towards licence and spectrum usage fees. MNL ABA ZMN

SC to hear telecom companies' plea on AGR-related dues on Friday

New Delhi, Feb 1 () It may have sought almost Rs 4 lakh crore from telecom and non-telecom companies in past dues but the government is not expecting any substantial windfall in the coming year.
 Finance Minister Nirmala Sitharaman, who provisioned Rs 1.3 lakh crore in receipts from telecom licence fee and spectrum usage charge for the next financial year, said the government is looking to address dispute over what revenues should be taken for calculating dues in a more comprehensive manner.
 In her post-Budget press conference, she said the issue is a complex one and the industry players are in dialogue with the government to resolve it.
 "I don't think I am looking at it purely from what the government will collect. This particular development in the telecom sector is something which all of us has watched, going through the proceedings of the court... it would not be right for me to just comment and say we are looking at this number or that," Sitharaman said.
 She was replying to a question on enhancing revenue collection target from the debt-ridden telecom sector.
 The government on Saturday increased the revenue estimate from the debt-ridden telecom sector by over two-folds to Rs 1.33 lakh crore for 2020-21 as compared to collection target in the current financial year, mainly on account of adjusted gross revenue dues.
 "It is fairly complex issue. The industry and affected parties are also in touch with the government. we are engaging with them, the department is engaging with them. We will be addressing this in more comprehensive manner," Sitharaman said.
 The government expects a revenue of Rs 58,686.64 crore under communications head in the current financial year as against a budgeted amount of Rs 50,519.8 crore in 2019-20.
 "Receipts under 'Other Communication Services' mainly relate to the licence fees from telecom operators and receipts on account of spectrum usage charges," the Budget documents said.
 The debt-laden telecom industry is saddled with Rs 1.47 lakh crore in additional statutory dues in the wake of a recent Supreme Court ruling on adjusted gross revenue (AGR). Telecom companies owe the government Rs 92,642 crore in unpaid licence fee, and another Rs 55,054 crore in outstanding spectrum usage charges.
 The dues of non-telecom public sector firms, including Oil India, GAIL, and PowerGrid, as per demand raised by the Department of Telecommunications exceed Rs 2.4 lakh crore.
 ICRA Assistant Vice-President (Corporate Ratings) Ankit Jain said that despite deferral of spectrum payments due in the financial year 2020-21 and financial year 2021-22, higher budgetary estimates for 2020-21 can be attributable to some participation in 5G spectrum auctions and expectation of payments of AGR-related dues.
 According to government data, the liabilities in the case of Bharti Airtel add up to nearly Rs 35,586 crore, of which Rs 21,682 crore is licence fee and another Rs 13,904.01 crore is the SUC dues (excluding the dues of Telenor and Tata Teleservices).
 In the case of Vodafone Idea, this number stands at a cumulative Rs 53,038 crore, including Rs 24,729 crore of SUC dues and Rs 28,309 crore in licence fee.
 The remaining liability is with state-owned BSNL and MTNL and some of the shut or bankrupt telecom companies.
 The Supreme Court had allowed three months to the affected telecom operators to cough up the amounts due to the government -- whose deadline expired on January 23 -- although the DoT did not take any coercive action against defaulters as their appeals seeking relaxation in payment timelines in pending in the apex court's order.
 Bharti Airtel, Vodafone Idea Ltd and Tata Teleservices have jointly filed a modification application in the Supreme Court seeking more time to pay the statutory dues.
 The fresh plea for relief on the payment schedule came after the Supreme Court last month dismissed the review petitions filed by telecom companies against the apex court's October 24, 2019, verdict.
 The DoT is also working on spectrum auction, which is likely to be held in April-May 2020. DP PRS MBI ANZ HRS

Govt not expecting substantial gain from AGR dues in 2020-21

<ul><li>The highest court of the country just upheld the Indian government's plea to demand huge sums of disputed levies from the telecom companies.</li><li>Airtel and Vodafone Idea may have to shell out ₹50,000 crore together to the Indian government after the latest Supreme Court.</li><li>The Department of Telecommunications believes that a whole lot of other earnings from dividends and handset sales should also be a part of it, while the companies contended that the levy should only be on the core telecom services revenue.</li></ul>Airtel and Vodafone Idea may have to shell out ₹50,000 crore together to the Indian government after the latest Supreme Court order that has upheld the demand for adjusted gross revenue (AGR) from Department of Telecom. Airtel and Vodafone-Idea's stock prices fall sharply. The latter losing nearly a fifth of their value in trade soon after the <keyword id="6360346" type="UNKNOWN" weightage="20" keywordseo="SC-verdict">SC verdict</keyword>. 
 
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 What is the AGR dispute? This is a dispute on how much licence and other fees has to be paid on the spectrum that telecom companies own. While telecom companies believe that they should pay the fees based on their earnings from the core telecom business only. But the Department of Telecommunications believes that a whole lot of other earnings from dividends and handset sales should also be a part of it. This would expand the scope of AGR and since it is an old dispute, it can be as high as ₹92,000 crore that all telcos have to pay up. The incumbent telecom companies of Vodafone-Idea and Bharti Airtel will have to pay the highest chunk of around ₹50,000 crore. The merged entity of Vodafone Idea has already borne the most brunt of the decision as its stock fell by 23% as soon as the news broke. Though Reliance Industries share price is not directly affected, if the government chooses to charge extra fees on handset sales, it will also affect Jio’s strategy going forward. It is known to sell handsets in large number of basic level handsets as it adds rural subscribers into its fold. It will affect the already fragile margins of the company. However, the financial muscle of Airtel and Vodafone-Idea will be much weaker after they pay up these dues, and their weakness directly and indirectly be to Reliance Jio's advantage. More importantly, this will also reduce the amount of money available with these companies to bid for the upcoming 5G spectrum auction. The story is developing.

Airtel and Vodafone-Idea get a devastating blow from India's Supreme Court

New Delhi, Jan 16 () With the Supreme Court dismissing its review petition on AGR dues, telecom company Bharti Airtel on Thursday said it is disappointed, and evaluating options to file a curative petition in the matter.
"While respecting the Supreme Court's decision, we would like to express our disappointment as we believe the long standing disputes raised regarding the AGR definition were bonafide and genuine," Airtel said in a statement.
The company is "evaluating filing a curative petition", it added.
"The industry continues to face severe financial stress and the outcome could further erode the viability of the sector as a whole. The industry needs to continue to invest in expanding networks, acquiring spectrum and introducing new technologies like 5G," it said.
The money now required to pay punitive interest, penalty and interest on penalty which forms nearly 75 per cent of AGR dues would have better served the digital mission of the country, Airtel added.
The comments came after the Supreme Court dismissed the plea of telecom majors, including Bharti Airtel and Vodafone Idea, seeking review of certain directions of the apex court on recovery of past dues amounting to Rs 1.47 lakh crore from telecom service providers.
The recovery of past dues by the government was based on adjusted gross revenue (AGR) of about Rs 92,000 crore.
A bench comprising Justices Arun Mishra, S A Nazeer and M R Shah did not find merit in the review plea. PRS MBI BAL

Disappointed with SC dismissing AGR review plea; may file curative petition: Airtel

New Delhi, Jan 19 () The telecom department is examining the legal applicability of January 23 deadline for payment of over Rs 2.4 lakh crore statutory dues in the case of non-telecom PSUs which were not originally party to AGR matter in the Supreme Court, according to sources.
Sources in the Department of Telecom (DoT) told that while the PSUs too have been asked to make payments related to statutory liabilities (after the SC in October upheld government's position on calculation of non-core revenue for AGR dues), the larger question is whether the January 23 deadline is legally enforceable on state-owned companies that were not direct party to the dispute.
The current view that is emerging in the DoT appears to be that the court-imposed timeline may not apply to PSUs, but the matter is being legally examined for clarity.
"Of course, the court has decided the issue of principle of what is AGR, so they (PSUs) have to pay but if they do not pay by January 23 it will not be contempt as it will be in case of the parties to the case. So PSUs have to pay and we have raised demands, but if they do not pay by January 23 it will not amount to contempt of court on their part because they were not party to the case, but they have to pay," a source added.
Another official also said that the issue of deadline for PSUs is being examined legally. Telecom companies Bharti Airtel and Vodafone Idea, on the other hand, are legally bound to comply with the payment timelines stipulated by the apex court.
Following the Supreme Court order of October last year, the DoT estimated that the total liability of 15 telecom companies, including penalties and interest, would be Rs 1.47 lakh crore. 
These AGR liabilities arose after the Supreme Court in October last year upheld the government's position on including revenue from non-telecommunication businesses for calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fees to the exchequer.
It has estimated another over Rs 2.4 lakh crore in liability for non-telecom companies, including state-owned gas utility GAIL India Ltd and power transmission firm PowerGrid, which had taken licences to trade broadband on optic fibre running along their pipelines and transmission lines.
The DoT has sought Rs 1.72 lakh crore in past statutory dues from state-owned gas utility GAIL India Ltd following the Supreme Court's AGR ruling. The DoT sent a letter to GAIL last month seeking these dues on IP-1 and IP-2 licences as well as Internet Service Provider (ISP) licence, in response to which, GAIL has told DoT that it owes nothing more than what it has already paid to the government.
The assessment puts PowerGrid liability at Rs 21,000 crore, and another Rs 40,000 crore liability was assessed of Oil India Ltd. However, a demand notice was served in case of Gujarat Narmada Valley Fertilizers &amp; Chemicals Ltd for Rs 15,019 crore. MBI ANZ MKJ

DoT examining if Jan 23 legal deadline for AGR payment applies to non-telecom PSUs

New Delhi, Jan 22 () Tata Communications, in which the government holds 26.12 per stake, on Wednesday said that it has made no provision for the telecom department's demand of Rs 6,633 crore for AGR dues as the Supreme Court order did not include appeal of the company which is still pending before the court. 
The company said that it has replied to the demand cum notice sent by the DoT in the second quarter ended September 2019 but it has not received any response from the department.
The Supreme Court has upheld DoT method of calculating revenue share between telecom companies and the government in its order dated October 24, 2019. Based on this order, DoT estimates that telecom companies are required to jointly pay around Rs 1.47 lakh crore by January 23.
 The DoT is learnt to have given no relaxation to the companies on the payment of AGR dues.
Tata Communications said that it has received demand of Rs 6,633.43 crore from the Department of Telecom towards licence fee on its adjusted gross revenue for the financial year 2006-07 till 2017-18 
"The company has existing appeals relating to its ILD and NLD licences which were filed in the past and are pending at the Hon'ble Supreme Court and Hon'ble Madras High Court and the company's appeals is not included in the Hon'ble Supreme Court ruling of October 24, 2019," the company said in its financial report. 
The company said that it believes that all its licenses are different from unified access services licence which was the subject matter of Supreme Court judgement. 
"The company has responded to the DoT denying and disputing the amounts claimed by the DoT in the demand cum show cause notice. The company has not received any response from the DoT after the submission," the note said. 
Tata Communications auditor in the note said the company is of the view that it will be able to defend its position and has obtained a legal opinion in this regard. 
"Currently the financial results do not include any adjustment pertaining to the same," the auditor note said. 
Tata Communications on Wednesday posted around 66 per cent dip in consolidated profit after at Rs 58.85 crore in the third quarter ended December 31, 2019. PRS MR

Tata Comm makes no provision for Rs 6,633 cr AGR dues as matter sub-judice

New Delhi, Jan 20 () The telecom department has slapped a Rs 48,000 crore demand notice on <keyword id="45187" type="COMPANY" weightage="20" keywordseo="Oil-India">Oil India</keyword> in past statutory dues, an order which the country's second-biggest state oil producer plans to challenge in Telecom Disputes Settlement and Appellate Tribunal (TDSAT). Following a <keyword id="6354977" type="ORGANIZATION" weightage="20" keywordseo="Supreme-Court">Supreme Court</keyword> ruling that non-telecom revenues should be included for considering payments of government dues, the Department of Telecommunications (DoT) has asked Oil India to pay Rs 48,000 crore in principal dues together with interest and penalty for using optic fibre network for internal communication. The dues sought are double the net worth of Oil India. "We have received a demand notice for paying payments by January 23. We plan to challenge it in TDSAT," Oil India Chairman and Managing Director Sushil Chandra Mishra told here.
 Oil India Ltd (OIL) is the second oil and gas firm after GAIL India to have been slapped a demand notice. From gas utility GAIL, the DoT has sought Rs 1.72 lakh crore.
 Mishra said his company's contract with the DoT provides for any dispute to be referred to TDSAT and so the company will be approaching the tribunal.
 Following the Supreme Court's October 24 order that non-telecom revenues earned by firms using spectrum or airwaves allocated by the government should be considered for calculating statutory dues, the DoT has totalled all the revenues earned by a company in last 15 years and raised demand.
 Sources said companies like OIL pay excise duty, oil development cess, profit petroleum and other levies to the government on oil and gas they produce and do not trade bandwidth to outside parties to earn any revenue.
 The optic fibre is only for internal communication purposes such as monitoring wells and production control, they said.
 OIL is not going to the Supreme Court as the company was not part of the litigation before the apex court and no direction was issued to it by the court.
 From GAIL, the DoT has sought Rs 1,72,655 crore in dues on IP-1 and IP-2 licences as well as Internet Service Provider (ISP) licence.
 In response, GAIL has told the DoT that it owes nothing more than what it has already paid to the government.
 The firm told DoT that it had obtained ISP licence in 2002 for a period of 15 years, which expired in 2017. But GAIL never did any business under the licence, and since no revenue was generated it cannot pay any amount.
 On IP-1 and IP-2 licences, GAIL has told the DoT that it generated Rs 35 crore of revenue since 2001-02 and not Rs 2,49,788 crore that has been considered for levying past dues, they said adding the revenue number the DoT is considering is after adding all the revenues that the company earned from gas trading and transportation business.
 Sources said the dues being sought are more than three times the net worth of GAIL and several times the actual revenue earned.
 While telcos such as Bharti <keyword id="15491" type="COMPANY" weightage="20" keywordseo="Airtel">Airtel</keyword> and <keyword id="15492" type="COMPANY" weightage="20" keywordseo="Vodafone">Vodafone</keyword> Idea may have had non-telecom revenues generated from using the government licence and spectrum, firms such as GAIL and OIL had no such revenue. The DoT is seeking Rs 1.47 lakh crore from all telcos in past statutory dues.
 Besides GAIL and OIL, the DoT is seeking Rs 40,000 crore from PowerGrid which had both a national long-distance as well as an internet licence. See also: <a href="https://www.businessinsider.in/stock-market/markets/news/vodafone-idea-share-price-falls-sharply-after-record-loss-in-second-quarter/articleshow/72065283.cms">Vodafone-Idea is now a ₹3 stock after a shocking quarterly loss</a> <a href="https://www.businessinsider.in/business/corporates/news/vodafone-has-to-settle-pending-tax-case-before-liquidating-india-business/articleshow/72069282.cms">Vodafone has to wrap up ₹22,100 crore tax case before it can think of liquidating India business </a><a href="https://www.businessinsider.in/business/corporates/news/telecom-agr-payments-can-plug-fiscal-deficit-gap/articleshow/72937256.cms">India’s Supreme Court may have paved the way to erase half of the country’s budget deficit</a>

Oil India wages war against telecom ministry over ₹48,000 cr AGR dues

New Delhi, Jan 17 () Shares of Vodafone Idea on Friday plunged over 39 per cent after the Supreme Court dismissed review petitions of top telecom firms seeking review of its earlier order asking them to pay Rs 1.47 lakh crore in past statutory dues by January 23.
 The company's scrip tanked 39.30 per cent to Rs 3.66 on the BSE.
 On the NSE, it plummeted 39.16 per cent to Rs 3.65.
 Bharti Airtel, however, was trading in the green after initial losses of 0.83 per cent on the BSE.
 The Supreme Court Thursday dismissed review petitions of top telecom firms including Bharti Airtel and Vodafone Idea seeking review of its earlier order asking them to pay Rs 1.47 lakh crore in past statutory dues by January 23 saying it did not find any "justifiable reason" to entertain them.
 In a big blow to telecom sector, India's apex court has dismissed the review petition filed by telecom companies to grant a relief on AGR liabilities, said a report by Motilal Oswal Institutional Equities.
 "The verdict may put a severe burden on telcos and have unconceivable repercussions, particularly against the backdrop of VIL facing a risk of shutdown (it may result in INR1.2t debt default, large-scale job losses and subscriber churn)," the report said.
 The apex court had on October 24 ruled that the statutory dues need to be calculated by including non-telecom revenues in what is known as adjusted gross revenues (AGR) of telcos.
 Bharti Airtel, in its plea, had sought review of the directions on aspects of levy of interest, penalty and interest on penalty relating to AGR.
 With the Supreme Court dismissing its review petition on AGR dues, Bharti Airtel on Thursday said it is disappointed, and evaluating options to file a curative petition in the matter.
 "While respecting the Supreme Court's decision, we would like to express our disappointment as we believe the long standing disputes raised regarding the AGR definition were bonafide and genuine," Airtel said in a statement. SUM ANS
ANS

Vodafone Idea shares nosedive over 39 pc

New Delhi, Nov 22 () Fitch Ratings on Friday said the two-year moratorium on payment of spectrum dues for telecom companies and hike in tariffs are unlikely to be sufficient to offset the impact of the Supreme Court ruling on past statutory dues on Bharti Airtel and Vodafone-Idea.
 The Supreme Court on October 24 ruled against the telcos in a 14-year-old dispute on the definition of adjusted gross revenue (AGR) which forms the basis for payment of statutory dues. The court ruled that non-telecom revenues should be included in AGR for payment of licence fee and spectrum usage charge.
 "The decision by all three private Indian telecommunication companies to raise tariffs from December 2019 and a two-year moratorium on payment of spectrum dues (announced by the government this week) are positive for the industry," Fitch said.
 "However, these are unlikely to be sufficient to offset the impact of a recent Supreme Court judgement for incumbents Bharti Airtel and Vodafone Idea Ltd."
 Reliance Jio (Jio), a subsidiary of Reliance Industries, is not affected by the ruling and is likely to continue to gain revenue market share, which will support RIL's deleveraging plans, Fitch said.
 Fitch said it has a negative outlook on the sector for 2020, primarily due to heightened financial risk associated with the large unpaid AGR-related dues.
 On November 20, the government announced plans to suspend payment of deferred spectrum dues for two years, which will ease cash flow pressure on all three telcos. Vodafone Idea and Bharti will benefit the most as their negative free cash flow will reduce by USD 1.7 billion and USD 850 million a year, respectively, for the financial year ending March 2021 (FY21) and FY22.
 The incumbents are likely to file a review petition in the Supreme Court and have also approached the government to seek other forms of relief including waiver or grant of deferred payment terms for the AGR dues and a reduction of licence fees and spectrum usage charges.
 "Despite the tariff hike, Fitch still believes it will take negative rating action on Bharti if it pays the AGR dues within three months and funds the payments entirely by debt," it said. "We will resolve the Rating Watch Negative on Bharti's ratings once we have greater clarity on the timing and financial impact of the regulatory dues and any remedial measures." ANZ ANS
ANS

Govt relief for telcos, tariff hikes may not offset impact of SC ruling: Fitch

<ul><li>Airtel has been one of the resilient stocks over the last few months even as the AGR issue and Coronavirus-fueled market crash has wiped off lakhs of crores of investor wealth.</li><li>The Airtel stock could rally thanks to the Jio-Facebook deal and the weakening of Vodafone Idea.</li><li>The Airtel stock has been given a ‘Buy’ rating with a target price of ₹606, which is an upside of more than 20%.</li></ul>Airtel was the market leader before the arrival of <keyword id="6354504" type="DEFINITION" weightage="20" keywordseo="reliance-jio">Reliance Jio</keyword>, but it has since <a href="https://www.businessinsider.in/business/corporates/news/mukesh-ambanis-reliance-jio-becomes-the-largest-telco-by-revenue-and-subscribers-as-industry-shows-signs-of-recovery/articleshow/73667566.cms">ceded its lead position</a> to the Mukesh Ambani-owned telecom company. However, the gap between the two leading mobile service providers may be too huge, according to market experts. When it comes to the market cap, though, Airtel is 1.6 times smaller than Jio. Vodafone Idea, on the other hand, is 39 times smaller than Jio, which is currently valued at ₹4.4 lakh crore <a href="https://www.businessinsider.in/business/news/jio-a-3-year-old-telecom-company-is-now-bigger-than-hdfc-infosys-and-itc-and-indias-largest-bank/articleshow/75290132.cms">after the Facebook deal</a>. <div type="image" title="Jio market cap telecom companies" msid="75533839" hostid="261"></div> <div type="Article" hostid="261" msid="75290132" title="Jio, a 3-year old telecom company, is now bigger than HDFC, Infosys and ITC – and India's largest bank" mstype="2" mssubtype="0"></div> Analysts suggest that Airtel has been one of the more resilient stocks in the market even as the economic downturn and Coronavirus crisis have wiped lakhs of crores of investor wealth. Its strong financials, the weakening of Vodafone Idea and the Jio-Facebook deal have all contributed to Airtel’s stock scaling back to its 52-week high of ₹568. <div type="image" title="Airtel stock 01_01_20 to 04_05_20." msid="75533863" hostid="261"></div> “Airtel has been able to raise funds to meet current AGR demands. In the short-term, Airtel will be the beneficiary if there is any weakening of Vodafone Idea,” said Mahesh Uppal, Telecom Analyst &amp; Director, Com First India told Business Insider. “It is often forgotten that, in general, Airtel and Vodafone, being early entrants to the market, have a higher quality of subscribers, in terms of paying capacity, than their competitors. If the AGR issue does not get resolved to the comfort of Vodafone Idea, Airtel will be best placed to benefit,” he further added. "Expects positive for Bharti Airtel after US based fund Silver Lake partner bought Reliance Jio stake at a premium. Higher valuation on Reliance Jio may positive on Bharti Airtel," <a href="https://twitter.com/MotilalOswalLtd/status/1257514187766460416" data-type="tilCustomLink" style="">said</a>Motilal Oswal. AGR, short for adjusted gross revenue, is a revenue sharing agreement between the Indian government and the telecom companies. According to this agreement, the telecom companies have to share a percentage of their AGR as annual license fee and spectrum usage charges. The Supreme Court recently ordered companies to pay up a disputed amount retrospectively for over a decade. According to the Department of Telecom estimates, Airtel owes ₹35,586 crore to the government. What are the analysts saying? “We retain our constructive view on Bharti Airtel (Bharti) considering its ability to capitalise on the higher data demand tailwind leveraging its strong balance sheet and network capacity,” said Edelweiss Research in its report dated April 20 where it pegged the target price for Airtel at ₹606. <table><tbody><tr><td>Brokerage</td><td>Target price for Airtel</td></tr><tr><td>Edelweiss </td><td>606</td></tr><tr><td>Angel Broking</td><td>594</td></tr></tbody></table> India is <a href="https://www.businessinsider.in/tech/news/heres-why-facebooks-mark-zuckerberg-is-paying-top-dollar-for-a-stake-in-mukesh-ambanis-reliance-jio/articleshow/75286331.cms">expected to add</a> more than 150 million active internet subscribers in the next 12 months, according to IAMAI. Given the weakening of Vodafone-Idea, both as a firm and a brand, the India telecom market is narrowing down to a duopoly between Reliance Jio and Airtel. The difference in market value of the two telcos is just too huge given the growth potential and the lack of competition. See also: <a href="https://www.businessinsider.in/business/telecom/news/india-is-changing-its-mobile-habits-and-that-can-help-airtel-and-vodafone/articleshow/75152973.cms">India is changing its mobile habits and that can help Airtel and Vodafone</a> <a href="https://www.businessinsider.in/business/telecom/news/airtel-signs-7636-crore-deal-with-nokia-to-enhance-4g-network-lay-foundation-for-5g-network/articleshow/75423000.cms">Airtel signs ₹7,636 crore deal with Nokia to enhance 4G network, lay foundation for 5G network</a> <a href="https://www.businessinsider.in/business/corporates/news/reliance-jio-stake-sale-to-silver-lake-boosts-ril-share-valuation/articleshow/75526873.cms">Reliance Jio’s valuation jumps more than half a billion dollars in just 12 days, thanks to Silver Lake</a>

Airtel shares set for a catch up rally after Reliance Jio takes a huge valuation lead

New Delhi, Jan 24 () State-run transmission utility Power Grid Corporation on Friday said it has filed an application before Supreme Court against Department of Telecom's demand of around Rs 22,000 crore in past dues, saying its revenue from telecom business was only 2 per cent of its turnover.
 Following the October 24 Supreme Court ruling that non-telecom revenues of telecom firms such as Bharti Airtel and Vodafone Idea should be included for considering payments of government dues, the telecom department (DoT) sought additional license fee from non-telecom firms also.
 The DoT had sought additional license fee of Rs 1.72 lakh crore from gas utility GAIL India Ltd, Rs 48,000 crore from OIL, around Rs 22,000 crore from Power Grid Corporation (PowerGrid), and has raised similar demands from RailTel and other public sector undertakings (PSUs).
 "On 23rd January 2020, POWERGRID has filed an application before the Hon'ble Supreme Court for clarification/modification of its order on 24th October 2019 and next course of action will be based on the outcome of the application," PowerGrid said in a statement.
 The company pointed out, "Non-Telecom revenue of Power Grid i.e. power transmission and its related consultancy business constitutes 98 per cent of revenue whereas revenue from telecom segment is only about 2 per cent."
 It also claimed that PowerGrid is National Long distance (NLD) and Internet Service Provider (ISP) licensee and is regularly paying the applicable license fee on Adjusted Gross Revenue (AGR) to DoT in line with terms &amp; conditions of respective license agreements and have also been assessed by DoT up to 2013-14.
 The company said that DoT has done provisional assessments for 2014-15 to 2017-18 and also reassessed for 2012-13 and 2013-14 and raised additional demand to the tune of Rs 21,954 crore in the past one year by addition of non-telecom revenue as miscellaneous income in AGR.
 PowerGrid has contested the demands before DoT and requested for its withdrawal, as the definition of AGR under NLD and ISP license agreements does not include such non-telecom revenue, it said.
 Moreover, it said that the DoT recently completed the assessment of NLD and ISP licenses for 2018-19 without addition of miscellaneous income and in fact assessed a refund to PowerGrid.
 The dispute, regarding interpretation of AGR pending before the Supreme Court, was between DoT and Telecom Service Operators (TSPs), who were holding Unified Access Service License (UASL) and migrated from National Telecom Policy (NTP)-1994 to NTP-1999, it said.
 The recent judgment on October 24, 2019, of the Supreme Court, is not applicable/binding on PowerGrid as it was not licensee prior to 2001 and never held UASL, it added.
 Further, it also said that the definition of AGR as per NLD and ISP license agreements as well as nature of limited telecom activity of PowerGrid is completely different and distinct from that relating to the TSPs, which were before the Supreme Court. KKS ANZ RVK

PowerGrid moves SC against DoT demand of Rs 22K Cr

New Delhi, Nov 22 () Vodafone Idea on Friday said Care Ratings has downgraded rating on its long term bank facilities and non-convertible debentures citing erosion in the firm's overall risk profile following the SC ruling on AGR dues, as also significant losses in September quarter.
"...the downgrade is on account of significant erosion in the overall risk profile of the company while taking into cognizance of the financial impact of unfavourable ruling of Supreme Court...," the company said in a regulatory filing.
It also takes into account "significant losses in Q2FY20 due to provision related to AGR dues, recognition of deferred assets and provision for additional depreciation/impairment of assets and consequently resulting in the significant deterioration in the tangible net worth and overall debt protection metrics", the filing said.
The credit rating has been revised to BBB- from A- on long term bank facilities and to BBB- from A- in case of non-convertible debentures, the filing added.
"It is hereby informed that Care Ratings (CARE), has downgraded its rating on Long Term Bank Facilities and Non-Convertible Debentures as per the rating rationale uploaded on its website today," the filing said.
In a separate filing the company informed that Crisil has downgraded 
its rating on non-convertible debentures of Rs 3,500 crores of erstwhile Vodafone Mobile Services Limited (VMSL).
"...the downgrade is on account of substantial impact on the financial risk profile on account of the potential payout against the adjusted gross revenue (AGR) related disputed liability and continued weak operating performance" the company said.
Accordingly, the rating has been revised to BBB- from BBB+ on non-convertible debentures, it added.
The Supreme Court has upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual adjusted gross revenue (AGR) of telecom companies, a share of which is paid as licence and spectrum fees to the exchequer.
Earlier this week, Telecom Minister Ravi Shankar Prasad had informed the Lok Sabha in a written reply that Bharti Airtel, Vodafone Idea and other telecom companies owe the government as much as Rs 1.47 lakh crore in past statutory dues, following the judgement.
In the case of Vodafone Idea, the liabilities stand at a cumulative Rs 53,038 crore, including Rs 24,729 crore of spectrum usage charges dues and Rs 28,309 crore in licence fee.
The government earlier this week doled out a Rs 42,000 crore relief to debt-laden telecom companies after it agreed not to take any payments for spectrum they use for the next two years, although it did not offer any relief on AGR dues. MBI BAL

You Searched For "agr dispute" and got 13 results

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Care downgrades rating on Vodafone Idea's long-term bank facilities, NCDs

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