Days after Supreme Court rejected telecom companies' review petitions in the AGR (adjusted gross revenue) case, Vodafone Idea and Bharti Airtel on Monday filed a modification petition in the apex court, seeking an extension of the January 23 deadline to pay revenue dues. Tata Tele, a subsidiary of the Tata Group, has also reportedly moved the court seeking an extension of the deadline.
Nearly two months after filing the review petition in the Supreme Court, the telcos were recently denied relief from the court on their AGR dues. In a massive blow to the telecom industry, the court on Thursday dismissed review petitions by the telecom companies. As a result, the companies have to pay pending AGR dues of nearly Rs 93,000 crore to the Department of Telecommunications by January 23.
In its previous order on October 24 last year, the Supreme Court had asked telcos to pay up their AGR dues within 90 days. The AGR dispute dates back to 2003 when the association of telecom operators filed the first plea with the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) challenging the definition of AGR. As per standard accounting practice, companies have to make provisions for such claims. As per estimates, Airtel has to pay Rs 21,682 crore while Vodafone Idea's dues stood at Rs 28,308 crore.
The court's verdict has a far-reaching impact on the sector which is already facing financial stress due to tariff wars and high debt burden. The profitability of telecom companies, barring Mukesh Ambani's Reliance Jio, is under stress after making provision for the payment of AGR dues. Airtel, for instance, posted net losses of Rs 2,3045 crore during the second quarter ended September 2019. Vodafone Idea reported highest ever quarterly loss of Rs 50,921 crore.
By Chitranjan Kumar