After questioning the insolvency proceedings initiated by the bankrupt telecom operators Reliance Communications, Aircel and Videocon Telecom, the Supreme Court bench headed by Justice Arun Mishra today raised questions on the AGR dues pending on Reliance Jio.
At the hearing on the controversial AGR (adjusted gross revenues) case, the court reportedly said that if Jio is using public assets like spectrum, why it should not be liable to pay AGR dues. In 2016, the Mukesh Ambani-controlled country's biggest telco entered into a spectrum sharing agreement with RCom where Jio would be using its spectrum in 17 circles. Jio has been using RCom's spectrum in the 800 megahertz band ever since to deliver its 4G services - even after RCom filing for bankruptcy last year.
Jio is one of the affected parties in the October 2019 judgement of the SC on the 14-year-old AGR case. Its dues were comparatively lower than incumbents like Airtel, Vodafone Idea, RCom and Tata Teleservices. In January, Jio became the first telecom operator to pay its AGR dues. The telco paid Rs 195.18 crore to the Department of Telecommunications (DoT) whereas the DoT's estimates pegged its dues at Rs 70.53 crore.
That's because the Jio paid its dues till January 31 even as DoT's estimates were calculated for license fee outstanding up to 2016/17, and SUC (spectrum usage charge) up to 2018/19. Jio reportedly had paid its dues for four licenses, including ISP (Internet service provider), NLD (national long distance), ILD (international long distance) and UL (unified license).
The court reportedly contended that dues arising out of natural resources are a matter of public money, and asked insolvent telcos like RCom and Aircel to submit details of their spectrum sharing agreements.
RCom representatives argued that Jio is using part of its overall spectrum, and a part of its overall spectrum is lying idle. Jio too defended itself by arguing that it has been paying SUC charges on the shared spectrum which is in line with the spectrum sharing guidelines of the government.
This is the first time the court has pulled up Jio for its spectrum sharing pact with RCom, and the possible dues emanating out of it.
In the previous hearing of the case, the SC had sought information from the government that whether spectrum can be sold as part of the bankruptcy proceedings against the insolvent telcos. SBI, the lead creditor for RCom, told SC that RCom's insolvency will fall apart if spectrum is not included as its assets.
In a related matter, the court also asked resolution professionals for RComm and Aircel to share details of the entities that have placed bids for these telcos under the IBC. In January, a Delhi-based firm UVARCL emerged as a top bidder for the assets of RCom and Reliance Telecom (a RCom subsidiary) that includes spectrum, real estate assets, enterprise and data centre businesses. Recently, UVARCL has received the NCLT (National Company Law Tribunal) approval for a Rs 6,630-crore resolution plan for Aircel. A lesser-known firm started in 2007, UVARCL claims to be among the top 10 ARCs (asset reconstruction companies) in the country over the last three years.
Jio, on the other hand, has reportedly proposed Rs 6,127 crore resolution plan for the towers and fiber business of RCom, housed under Reliance Infratel, to NCLT.