DoT asks telecom companies to clear dues in 3 months
14 November 2019
The Department of Telecommunications (DoT) has issued notice to telecom operators to pay their revenue share dues within three months as directed by the Supreme Court. However, the department has given telecom operators the option to clear all the dues on self-assessment basis.
The Supreme Court in its last month's ruling had asked telecom companies to deposit the Rs93,000 crore dues by way of revenue share to government and interest thereon within three months. "We give three months’ time to deposit the amount, which is due and compliance be reported."
"...you are therefore directed to make the payment in accordance with the order of the Honourable Supreme Court dated October 24, 2019 and submit the requisite documents to ensure the compliance within the stipulated timeframe," said the DoT notice.
An internal estimate prepared by the DoT, however, puts the total dues of telecom service providers arising from the Supreme Court order at around Rs1.33 lakh crore.
Of this, Bharti Airtel has the highest liability of Rs62,187.73 crore, followed by Vodafone Idea Rs54,183.9 crore and BSNL and MTNL Rs10,675.18 crore. Companies under insolvency like Reliance Communications and Aircel have dues outstanding of Rs32,403.47 crore while companies under liquidation owe Rs943 crore.
With substantial liabilities, including the government’s share of the telco's adjusted gross revenue (AGR), which could be over 39,000 crore, Vodafone Idea said it would rather leave the venture to insolvency proceedings unless the government decides to provide substantial relief.
Reports citing Aditya Birla Group said it will not infuse any fresh equity into Vodafone Idea Ltd, its telecom joint venture with Vodafone Group of UK, if the government does not provide substantial relief, including on the telco's adjusted gross revenue (AGR)-based dues.
In signs that some relief in on the way, British telecom major Vodafone’s Global CEO Nick Read did a u-turn on Wednesday, claiming he was quoted out of context and re-affirmed the company’s commitment to the market. A day before he had complained that Vodafone’s India operations are on the brink of collapse over high taxes and spectrum dues demand,
Reports on Tuesday quoted Read as saying during a media interaction in London that “unsupportive regulation, (and) excessive taxes” in India could undo the company’s India operations.
In fact, in a letter to PM Narendra Modi and telecom minister Ravi Shankar Prasad on Wednesday, he “apologised for the impressions that the press coverage conveys” and about certain quotes “which I never said”, according to official sources.
“I wish to put on record that this does not accurately reflect my comments to the media. Furthermore, we did not speak to any Indian media yesterday, neither did any of my team,” Read said, as he claimed that “some of the coverage has been distorted.” A top-level source said the Vodafone CEO expressed regret after the government took note of the comments and objected to the statement where Indian regulatory action, or taxation rates, were blamed for the company’s poor performance.
“The government at the highest level, expressed displeasure and disapproval at the tone and tenor of Read’s statement. It was made clear to the company that the behaviour will not be appreciated,” the source said.
It is believed that Kumar Mangalam Birla, the chairman of Vodafone-Idea (JV between Vodafone and Aditya Birla group), also expressed regret on the statement and reiterated the company’s commitment to maintain business operations in the country.
Read further said, “We remain invested in India growth story and it remains a key market for us.”
Vodafone’s India JV has been in deep financial stress, and has slipped into the red after the aggressive entry of Reliance Jio in September 2016, was jolted further when the Supreme Court ordered telecom companies (on October 24) to pay back nearly Rs93,000 crore in past dues. Vodafone-Idea’s share is estimated at over Rs28,000 crore.