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The Supreme Court on Monday, during the hearing on the adjusted gross revenue (AGR) matter of telecom companies, questioned the Centre as to how is it possible to sell the spectrum and whether it is transferable. A bench, headed by Justice Arun Mishra, told Solicitor General Tushar Mehta, representing the Department of Telecommunications (DoT), to come prepared on the next hearing, and explain how can spectrum be sold or whether is transferable. The bench also asked Mehta to get the NCLT orders connected with the query, as it scheduled the next hearing on the matter on August 14. Mehta contended before the bench that the government has filed an appeal saying spectrum is a national property and it should not be part of bankruptcy assets. At this, the bench questioned: "Why there was a delay in filing the appeal? What if the spectrum is sold in the meanwhile?" Mehta contended before the bench that the Centre has told the National Company Law Tribunal that spectrum is a national property, cannot be an asset of the company, and it cannot be sold. The bench also questioned how Aircel's spectrum and license were sold and who gave the permission for it. Aircel's monitoring committee's lawyer contended before the bench that no dues to government are be paid under the bankruptcy resolution plan, and insisted that he will place the details in court. The lawyer contended that the company paid the money to buy spectrum, and it is a transferable asset. The Centre, however, said Aircel's dues were Rs 12,000 crore. As the bench questioned the DoT as to how it proposes to recover the <keyword id="8275485" type="UNKNOWN" weightage="20" keywordseo="agr-dues">AGR dues</keyword> from a company which has gone into insolvency, Mehta replied that DoT's stand is that spectrum cannot be part of bankruptcy assets.

Supreme Court adjourns AGR case hearing to August 14

The Supreme Court on Monday reserved its judgment on the issue of recovery of adjusted gross revenue (AGR) dues from insolvent telecom companies. A bench headed by Justice Arun Mishra is likely to pronounce the judgment on three counts: Staggered payment schedule, where the Centre said it is fine with 20-year arrangement to recover AGR dues; Can spectrum be transferred or sold by companies under IBC; and, additional liabilities, if any, on Jio, Airtel for the past dues of RCom, Videocon, and Aircel. Airtel had spectrum sharing and trading pacts with Videocon and Aircel, whereas Jio had it with RCom. The court had asked the Department of Telecommunications (DoT) to share the details of 'demand under process' for raising the liabilities against Airtel and Jio in the backdrop of spectrum-sharing. The bench also comprising Justices S Abdul Nazeer and MR Shah observed that if DoT does not provide the correct position on the AGR demands, then the due figures quoted in the ruling could go wrong. "It has been nearly 10 months to the AGR ruling -- why has the DoT not yet raised the demand?" The DoT informed the bench that no demand has been raised against Jio and Airtel for part dues of RCom and Videocon, and that the assessment of Jio and Airtel liability for the past dues is "under process". Senior Advocate Harish Salve, appearing for Committee of Creditors for RCom, contended before the bench that the right to use spectrum is an "asset which can be sold", if the company wants to. Salve added that the resolution plan proposes the sale of the right to use spectrum is in line with the licence trading guidelines. Senior Advocate Kapil Sibal, appearing for Airtel, contended that if the liability of the past dues of Videocon were to be imposed on Airtel, why wait for so long. Instead, the DoT should have clarified it long back, he argued. The court observed that according to trading guidelines, the seller of the spectrum shall satisfy all pending dues, before the sale. The bench said that it understood that upon the non-payment of dues by the seller, the trading guidelines would transfer the burden on the buyer. The DoT counsel contended that under trading guidelines, the past dues have to be cleared prior to the spectrum-trading, and under these guidelines, the DoT could recover the dues from seller and buyers. The bench questioned why no demand was raised against Airtel for the past dues of the Videocon spectrum. Sibal said Airtel had been paying all pending dues since the acquisition of the Videocon spectrum in May 2016. The apex court remarked that what is being proposed seems like renting out a house to a tenant and the latter selling the house under Insolvency and Bankruptcy Code.

Supreme Court reserves order on recovery of AGR dues from insolvent telecom companies

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

New Delhi, Feb 27 () Troubled Vodafone Idea has written to the telecom department expressing its inability to pay full AGR dues unless the government takes urgent measures, including allowing staggered payment, reduction in levies and implementation of floor prices in the crisis-ridden sector. The letter to the communications ministry comes at a time when the company is confronted with AGR dues of over Rs 53,000 crore and has paid a mere 7 per cent of its liabilities so far. Warning that it is "not in a sound financial state", Vodafone Idea said the company would be in a position to meet its liabilities only if the government initiates steps including allowing set offs for GST credit accumulated so far, and permitting staggered mechanism for payment of balance amount of interest, penalty, and interest on penalty. It said adjustment of GST credit due from the government could help in meeting its AGR payment. Citing its losses over last few years, the company said the financial stress in the telecom sector is widely acknowledged. The company underlined its current subscriber base of 300 million, and employee base of 10,000 direct staffers while making a strong plea for "urgent support from government". Vodafone Idea Ltd (VIL) said it can settle the balance of its self-assessed principle if the Centre allows set-offs of Rs 8,000 crore worth of GST credit lying with the government. In fact, the amount when fully set off will even pay in part the self assessed interest, it said in the letter to the telecom department seen by . The company has sought a moratorium of three years on payment of interest and penalty, and subsequent payment timeline of 15 years at an interest of six per cent. The letter, similar to the one written by industry body COAI, has also batted for grant of loan, equal to AGR amount at six per cent interest rate "so that the AGR liability may be discharged immediately". When contacted, a VIL spokesperson refused to comment on the issue. VIL, in its letter, further pitched for reduction in licence fee to three per cent from the current eight per cent, and also sought reduction in spectrum usage charges (SUC) to zero or a uniform rate of one per cent for all spectrum. Blaming the below-cost pricing of telecom services, compelled by competitive pressures as being the root cause of financial stress, the company sought immediate implementation of floor price in tariffs. VIL said a floor price needs to be immediately made effective, say from April 1, 2020 to ensure that the sector is fully sustainable and in a position to pay deferred spectrum and AGR dues and still invest to create world-class network and services. The company said the introduction of floor price will enable revenue of the telecom sector to nearly double from the current level of Rs 1.75 lakh crore. "Revenue of VIL is likely to touch the revenue levels which existed five years ago i.e 2015-16 and ensure that enough cash is generated to pay for deferred auction spectrum dues and deferred AGR payments of interest, penalty and interest on penalty," it said. VIL Chairman Kumar Mangalam Birla has in the past made it clear that the company will fold if it is forced to make payment of over Rs 53,000 crore dues. Birla has held multiple rounds of discussions with the finance minister and the telecom minister over the last few days to explore options to keep the company afloat. In all, as many as 15 entities owe the government Rs 1.47 lakh crore -- Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges. These dues arose after Supreme Court, in October last year, upheld the government's position on including revenue from non-core businesses in calculating the annual Adjusted Gross Revenue (AGR) of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer. The Supreme Court earlier this month rejected a plea by mobile carriers such as Bharti Airtel and VIL for extension in the payment schedule and asked them to deposit an estimated Rs 1.47 lakh crore in past dues for spectrum and licences. MBI ANU

Not in sound financial state; can meet liabilities only with govt support: Voda Idea

(Eds: Adding details) New Delhi, Mar 4 () The government on Wednesday asked Bharti Airtel, Vodafone Idea and other telecom companies to pay remaining AGR dues as per the Supreme Court order without further delay, according to sources.The telecom department wrote to all telcos asking them to pay balance dues "without delay" and submit detailed bifurcation of payments (explanation of self-assessed amounts), which it said are necessary for proper reconciliation of legitimate AGR dues.The government has so far received about Rs 26,000 crore from AGR payments, including adhoc/ buffer amounts given by telcos to meet any reconciliation differences with the telecom department.However, the amounts paid by telcos is woefully lower than the DoT's Adjusted Gross Revenue (AGR) calculations, prompting the telecom department's latest move.Sources privy to the development said that as the amount paid by telcos is based on their own self-assessment, the department has asked them to explain how they have arrived at the said calculation, and pay the balance amounts.They said the letter was not in nature of a 'threat' but rather seeking an explanation for the basis of companies' calculations and asking for remaining statutory payments.Bharti Airtel has submitted over Rs 18,000 crore to the DoT declaring that it has made full and final settlement towards its AGR liabilities but the amount is far less than Rs 37,500 crore (including Telenor) that the government estimates the company owes it.It is pertinent to mention here that Bharti Airtel on Saturday said it has made payment of Rs 8,004 crore towards AGR dues to the government, an amount over and above Rs 10,000 crore it has already paid earlier. The amount of Rs 8,004 crore includes Rs 3,004 crore towards full and final settlement on AGR dues based on self assessment, and a deposit of buffer Rs 5,000 crore to cover the DoT's reconciliation differences.Similarly, Tata Teleservices has paid Rs 2,197 crore in AGR dues, and earlier this week topped that up with additional Rs 2,000 crore to cover reconciliation differences, while DoT estimates its liabilities to be about Rs 14,000 crore.VIL has so far deposited Rs 3,500 crore in two tranches to the DoT but is still assessing its full AGR dues. According to the government's calculation, VIL owes Rs 53,000 crore in such liabilities.In all, 15 entities owed the government Rs 1.47 lakh crore in unpaid statutory dues -- Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges. Of the estimated dues that include interest and penalty for late payments, Airtel and VIL account for about 60 per cent.These dues arose after the Supreme Court, in October last year, upheld the government's position on including revenue from non-core businesses in calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.The Supreme Court last month rejected a plea by mobile carriers such as Bharti Airtel and VIL for extension in the payment schedule and asked companies to deposit their past dues for spectrum and licences.Since the February 14 tongue lashing that the Supreme Court gave telecom companies for missing its previous deadline of January 23 to pay past dues as well as the DoT for failing to enforce it, firms and the telecom ministry had been doing separate maths on the actual dues. MBI MBI BALBAL

Govt asks Airtel, Vodafone Idea, others to pay balance AGR dues without delay: Sources

New Delhi, Mar 3 () Bharti Airtel has made the payment of Rs 1,950 crore to the telecom department towards its deferred spectrum dues, while Reliance Jio paid Rs 1,053 crore, sources said on Tuesday.Deferred spectrum dues are essentially instalment payments that are made by telcos for airwaves bought in past auctions and are separate from their AGR liabilities. The sources said that while Bharti Airtel has made payment of Rs 1,950 crore to the Department of Telecommunications towards deferred spectrum dues, Reliance Jio has paid Rs 1,053 crore.Vodafone Idea too paid about Rs 3,043 crore towards deferred spectrum dues, as per the sources. VIL's payment in particular assumes significance as the company has been under tremendous financial pressure and is confronted with AGR (Adjusted Gross Revenue) liabilities of over Rs 53,000 crore.This is the last lot of payments that telcos will make towards deferred spectrum liabilities to the DoT, as the Union Cabinet had late last year approved a two year's moratorium on such spectrum dues. MBI MBIBAL

You Searched For "agr spectrum dues" and got 6 results

Supreme Court adjourns AGR case hearing to August 14

IANS

Supreme Court reserves order on recovery of AGR dues from insolvent telecom companies

IANS

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

PTI

Not in sound financial state; can meet liabilities only with govt support: Voda Idea

PTI

Govt asks Airtel, Vodafone Idea, others to pay balance AGR dues without delay: Sources

PTI

Airtel pays Rs 1,950 cr to DoT towards deferred spectrum dues; Jio pays Rs 1,053 cr: Sources

PTI

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