Supreme Court to hear telcos’ AGR pleas next week

Providing a relief to incumbent telecom companies, the Supreme Court has decided to hear their modification petition on the Adjusted Gross Revenue (AGR) issue next week, even though the apex court is yet to fix a date.

The move comes as a respite to the financially-stressed telecom sector as the Department of Telecommunications will not seek the dues by the earlier set January 23 deadline. The licensor would now wait for the Supreme Court’s ruling in the issue, industry experts said.

“We mentioned the matter today at the Supreme Court today, and the court has listed the application for sometime next week,” Shally Bhasin, partner with Delhi-based Agarwal Law Associates, which is representing Vodafone Idea, told BusinessLine.

On Monday, Vodafone Idea, Bharti Airtel and Tata Teleservices moved a joint application before the Supreme Court seeking modifications to the earlier ruling that said the telecom companies should pay their AGR dues before January 23. The companies, which had posted huge losses in the second quarter due to AGR provisioning, also sought waiving of the penalties.

The matter was mentioned before a bench headed by Chief Justice of India SA Bobde, who said it will list the fresh pleas “sometime in next week”. The petitions would be listed before the same bench that heard the earlier petitions.

“The expectation is that now the DoT will wait for the Supreme Court’s decision on the matter as the operators don’t have the financial ability to pay the AGR dues. Technically, this is an extension till the court decides on the issues,” Rajan S Mathews, Director-General of Cellular Operators Association of India, said.

“The telecom companies are seeking a financing package that makes sense, such as a 15-year holiday or window period to pay AGR dues. Another plea before the Supreme Court is to redefine AGR, as now non-telecom revenues are also being taxed,” he added.

On January 17, in a major setback to the telecom operators, the Supreme Court dismissed their plea seeking a review of its earlier order and asked incumbents to pay ₹1.47-lakh crore as AGR dues by January 23.

While Bharti Airtel has dues of more than ₹35,500 crore, Vodafone Idea needs to pay more than ₹53,000 crore and Tata Teleservices has dues of ₹13,823 crore.

Bharti Airtel and Vodafone-Idea had said earlier they would file curative petitions before the Supreme Court, while analysts and industry experts were sceptical and said that the incumbent telecom firms should be prepared for the worst case scenario as “the probability of resolution remains bleak”.