Business Other News 25 Oct 2019 Supreme Court verdic ...

Supreme Court verdict hits telecom sector hard

Published Oct 25, 2019, 1:40 am IST
Updated Oct 25, 2019, 1:40 am IST
Supreme Court.
 Supreme Court.

New Delhi: In a jolt to the troubled telecom sector, the Supreme Court on Thursday ordered the service providers, including Bharti Airtel, Vodafone Idea and many defunct telecom companies, to pay the government Rs 92,000 crore dues arising from sharing of adjusted gross revenue (AGR).

The court said that apart from the fee on account of termination of call and roaming charges, all revenues coming to telecom service providers would be counted in AGR.

The apex court upheld the government's position on including revenue from non-telecommunications businesses in calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fees to the exchequer.

While the government had raised a demand of Rs 92,000 crore from Bharti Airtel, Vodafone, Idea and many now-defunct telecom operators in licence fees based on revised revenue, the actual payout will be around Rs 1.4 lakh crore after including spectrum usage charge, penalty and interest, it is learnt.

Over the next few days, the numbers will get further calibrated. Older telecom companies would be the worst hit, while Reliance Jio, which entered in 2016, owes the least among all.

“Fresh calculation will be done now for all the liabilities of telecom operators. The total amount is around Rs 1.34 lakh crore. It is likely to go up by 4-5 per cent as the liability of one more quarter will get added to it,” an official with telecom company said.

Directing the cash-strapped telecom service providers to cough-up the past dues, a bench of Justice Arun Mishra, Justice S. Abdul Nazeer and Justice M.R.Shah said they would decide on the time-line for the payment of Rs 92,000 crore by the service providers.

The court will pass a separate order on the time-frame within which Rs 92,000 crore would be paid by the telecom operators.

Telcos have to pay around 3 per cent of AGR as spectrum charges and another 8 per cent as licence fees. The court has not accepted the contention by the telecom service providers that AGR should exclude the earnings from non-telecom revenues, including rent, dividend income, interest income, profit from the sale of fixed assets, etc.

Location: India, Delhi, New Delhi


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