In a big relief to telecom companies, the Supreme Court has allowed telcos 10 years to make staggered payment of the pending AGR dues worth thousands of crores. The apex court bench, head by Justice Arun Mishra, said the telecom companies will have to pay 10 per cent of total pending dues upfront by March 31, 2021, and can't default on the annual payments.
As per the verdict, the respective telecom company chairmen will have to give an undertaking and those defaulting on payments will face penalty and contempt of court. The SC has also fixed February 7 as the date for annual instalment.
Earlier, telcos, as well as DoT, had proposed different timelines for payment of AGR dues. While the Department of Telecommunications had sought a 20-year time frame for payment of AGR related dues, incumbent telcos Vodafone Idea and Bharti Airtel have sought 15 years for the same. The SC had reserved its judgement on the matter on July 20.
On the aspect of transfer of the spectrum rights, the SC said the matter should first be decided by the National Company Law Tribunal (NCLT).
The SC on August 10 had asked the DoT to apprise it about how it planned to recover AGR related dues from telecom companies facing insolvency proceedings and whether spectrum given to these companies can be sold. The court later said that telecom operators using the spectrum of ailing phone companies will have to pay their AGR dues, but the verdict was reserved on August 24.
The apex court had delivered the verdict for calculating the government dues of telecom companies in October 2019. The court had also upheld the government's broader definition of AGR, dealing a major financial blow to the telcos.
Meanwhile, Bharti Airtel share price rose over 6% today after the Supreme Court allowed telcos 10 years to make staggered payment of the pending AGR dues. Share price of Bharti Airtel gained 6.37% to Rs 546.7 against previous close of Rs 513.95. Vodafone Idea share slipped 24.53% to Rs 7.69 on the BSE. The firm expected period of staggered payments of 15 or 20 years for payment of dues.