Airtel pays Rs10,000 cr of AGR dues; SC rejects Voda Idea's Rs2,500 cr proposal
17 February 2020
Bharti Airtel has paid the Department of Telecom Rs10,000 crore towards statutory dues related to AGR, following the firm stance of the Supreme Court over recovery of dues by the telecom department, even as the apex court rejected a proposal by Vodafone Idea to pay up Rs2,500 crore against its total dues of Rs53,038 crore
Airtel owed nearly Rs35,586 crore, including licence fee and spectrum usage charges, to the government.
After facing the ire of the Supreme Court for putting on hold recovery of dues from telecom companies, the telecom department on 14 February began issuing orders asking firms such as Bharti Airtel and Vodafone Idea to clear past dues immediately..
As much as Rs 9,500 crore has been paid on behalf of Bharti Airtel (including Telenor India which merged with the company), and another Rs500 crore for Bharti Hexacom.
Vodafone Idea has to pay the government Rs28,000 crore by today but it is struggling with mounting losses and debt and has few options.
Vodafone Idea’s gamble seeking more time to pay the Rs53,000-crore dues it owes the government has failed, leaving the mobile carrier with few options as it weighs its future.
Vodafone Idea, struggling with mounting losses and debt, owes the most among its peers.
In a statement on Saturday (15 February), the beleaguered operator said it’s assessing the amount it will be able to pay. It also said its ability to continue as a going concern depends on whether the court will modify a previous order that had set 24 January as the deadline for payment.
British partner, Vodafone Group Plc, has completely written off the value of its 45 per cent holdings in the venture and signaled it isn’t keen to invest more, while chairman Kumar Mangalam Birla warned of a potential collapse in the absence of any relief over the payment.
Although the top court rejected the wireless carriers’ plea to extend the payment deadline, it warned that the company will have to face contempt if the payment is not made by then. Vodafone is hoping that it can use this hearing next month to convince the court to relax the timeline. The company said continuing as a going concern will depend on a positive outcome in court.
Vodafone Idea is also left with one last, legal option. A curative petition, like a review petition, is considered by judges in their chambers and is meant to cure a gross failure of judiciary or abuse of judicial process in a verdict.
The government had earlier indicated that it may be open to giving some relief to the struggling wireless carriers. Stripping out interest from the dues or paying the amount in tranches could be some of the alternatives. Any reprieve from the government, however, will come against the backdrop of rising fiscal deficit and need to boost India’s sluggish economy.