DoT pushing Airtel, Vodafone Idea for some upfront payment of AGR dues and rest in instalments

MUMBAI: The telecommunications department is pushing mobile phone operators like Bharti Airtel and Vodafone Idea to make some upfront payment towards their balance adjusted gross revenue (AGR) dues, before being allowed to stagger the rest over several years, senior officials said.
The move comes after both Bharti Airtel and Vodafone Idea told the department that they are not in a position to immediately pay any more statutory dues than what they have already paid, officials and industry executives said.

The two sides – telcos and DoT – need to present a payment roadmap before the Supreme Court at its next hearing, which is scheduled on July 20.

Vodafone Idea and Airtel still need to pay about Rs 51,400 crore and Rs 25,980 crore worth of balance AGR dues, respectively, having paid nearly Rs 6,854 crore and Rs 18,004 crore so far.

The two operators have asked that they be allowed to stagger the balance payment over a maximum of 20 years, backing a government proposal. This proposal if accepted by the court is their last window of hope for some extra time to pay up their dues.

"Both the telcos have informed the DoT that they have paid what they could and are not in a position to add to the upfront payments,” a government official told ET. “They have raised issues with DoT's calculations as well.”

Vodafone Idea has even warned that it would shut shop unless allowed to pay in instalments.

The dispute over statutory dues has been ongoing between telcos and the government for nearly 16 years. It culminated in an October 2019 Supreme Court order backing DoT and widening the definition of AGR to include non-core items.

This left some 16 telcos – most of them either defunct or having exited India or merged with others – facing Rs 1.7 lakh crore by way of dues comprising of license fees, spectrum usage charge, interest and penalties to the government. Airtel and Vodafone Idea – being among the oldest operators – were the worst hit.

DoT’s latest stance is in line with the Supreme Court’s observation in its previous hearing that the telcos need to make some upfront payment, to avail of a staggered payment mechanism.

“Although the telcos have also told the top court that they can’t pay more, DoT won’t take any chances and will need to show that they are doing their best to recover the dues,” a second official told ET.

In the previous hearings, a three-judge bench led by Justice Arun Mishra had slammed the department on several issues, including not making attempts to recover the AGR dues on time.

The bench, also comprising Justices MR Shah and S Abdul Nazeer, had in June directed the telcos to file audited balance sheets of the past 10 years – after Vodafone Idea highlighted its stressed financials, and to come up with payment proposals, and asked the telecom department to consider them.

As per DoT’s calculations, Airtel’s dues are Rs 43,980 crore and Vodafone Idea's Rs 58,254 crore.

The telcos had previously pleaded to the Supreme Court to grant them a 20-year timeline to pay their AGR dues without any additional bank guarantee or personal guarantees or upfront payments.