Blow to telecom firms; Supreme Court rejects plea on past dues
The court in its October 24, 2019 order had directed the service providers to pay Rs 92.000 crores to the government.
New Delhi: The Supreme Court on Thursday rejected a plea by telecom service providers (TSPs) to reconsider its own 2019 verdict directing them to pay Rs 92,000 crores in past dues arising from sharing of Adjusted Gross Revenue.
The TSPs who sought reconsideration of the order to pay Rs 92,000 crores included Bharti Airtel, Vodafone Idea and many now-defunct telecom firms.
The court in its October 24, 2019 order had directed the service providers to pay Rs 92.000 crores to the government. Dismissing the plea, a bench of Justices Arun Mishra, S. Abdul Nazeer and M.R. Shah. “Having perused the review petitions and connected papers with meticulous care, we do not find any justifiable reason to entertain the review petitions. The review petitions are, accordingly, dismissed.”
Consequently, it also rejected the plea for an open court hearing of the review petitions.
Bharti Airtel said it was disappointed with the Supreme Court’s decision and it would evaluate filing another petition.
“The industry continues to face severe financial stress and the outcome could further erode the viability of the sector as a whole,” Bharti said in a statement.
The internet service providers (ISPs) supported the TSPs and exhorted the government to step in immediately to review the definition AGR for the survival of the telecom sector.
“It is going to be a disaster for the telecom industry. Dismissal of review petition will lead to a duopoly situation, which is not good for consumers. Small ISPs will not be able to survive unless government steps in to review AGR definition," Internet Service Providers Association of India president Rajesh Chharia said.
Analysts were also worried about the development. “We wonder how weaker operators like Vodafone Idea will make this payment, and not that Bharti Airtel is getting any respite as the amount has to be paid up,” said Gaurang Shah, vice president at Geojit Financial Services Ltd. “It isn’t easy to raise tariffs and retain customers. It remains to be seen how companies now respond to this decision because the court has twice spelled it out for them.”
For two decades, the TSPs had challenged the way authorities calculated their AGR, a share of which is paid as licence and spectrum fees. But in October, the court upheld the government’s method while rejecting the companies’ plea to exclude revenue from non-telecommunications businesses.
The top court by its October 24, 2019 verdict had directed the cash-strapped TSPs to pay up Rs 90,000 crore—around 3 per cent of AGR as spectrum charges and 8 per cent as licence fees.
The court had said that except for termination fee and roaming charges, all revenues coming to telecom service provider would be counted in AGR.