In a blow to telecom giants Bharti Airtel and Vodafone Idea, the Supreme Court has rejected their plea that sought a review of its October 24 verdict which asked the telcos to pay over Rs 92,000 crore to the government. If we combine Tata Teleservices with the two, all three have to collectively pay Rs 1.02 lakh crore to the Centre. Airtel and Vodafone Idea, which have reported record losses in the September quarter, will now have to pay the dues in a week’s time. In the meanwhile, the shares of both companies tanked.
The government and the ailing telecom sector had been at loggerheads over the definition of adjusted gross revenue, or AGR. While the telcos say that the AGR includes only license and spectrum fees, the government, citing 2015 Telecom Disputes Settlement and Appellate Tribunal (TDSAT) ruling, argues that in addition to license fees and spectrum fees, AGR includes rent, dividends and profits on the sale of assets.
‘While respecting the Hon’ble Supreme Court’s decision, we would like to express our disappointment as we believe the long standing disputes raised regarding the AGR definition were bonafide and genuine. The industry continues to face severe financial stress and the outcome could further erode the viability of the sector as a whole,’ an Airtel spokesperson said in a statement.
‘The industry needs to continue to invest in expanding networks, acquiring spectrum and introducing New Technologies like 5G. The money now required to pay punitive interest, penalty and interest on penalty which forms nearly 75% of AGR dues would have better served the digital mission of the country,’ it added. Airtel and Vodafone Idea also said that they evaluating filing of a curative petition.
Meanwhile, Reliance Jio has become India’s largest telco by both subscriber base and revenue market share, within three years of its launch. According to the Telecom Regulations Authority of India, the Mukesh Ambani-led firm added 5.6 million mobile subscribers in November, which means it now has close to 370 million users. Jio now holds 32.04 per cent of subscribers as compared to 30.79 per cent share it had in October end.