AGR dues: Telecom companies, DoT brace for next legal spat

Telecom operators like Bharti Airtel and Vodafone Idea, and the department of telecommunications (DoT) are headed for another legal clash over payment of 10% of their adjusted gross revenue dues as per the order of the Supreme Court. The two sides are differing as to when do they need to pay their first installment.

While DoT has maintained that the operators need to pay their first installment, which is 10% of the total dues by March 31, 2021, both the operators have said that since they have already paid more than 10% of their total dues before the SC order, their next installment is due in March 2022.

Though, at this stage, DoT officials have ruled out taking any legal opinion on the matter as it maintains that the SC order is quite clear, legal observers maintain that ultimately the parties may have to seek a clarification from the apex court as the operators, based on the legal advice of their lawyers are also quite confident of their stand.

The confusion has arisen because of the wording of the order which states, “That, at the first instance, the respective telecom operators shall make the payment of 10% of the total dues as demanded by DoT by 31.3.2021.”

The order further states, “Telecom service providers have to make payment in yearly instalments commencing from 1.4.2021 up to 31.3.2031 payable by March 31 of every succeeding financial year”.

Since Bharti Airtel has already paid Rs 18,004 crore of its total dues of Rs 43,980 crore, which is more than 10%, the company has told the DoT that its next installment is due only in March 2022. Similarly, Vodafone Idea has also said that since it has paid Rs 7,854 crore of its total dues of Rs 58,254 crore, which is more than 10%, it does not need to pay anything by March 2021.

However, DoT officials told FE that the SC order is clear that operators need to pay 10% of their total dues by March 31, 2021, and since the court was aware of what the operators have paid so far, it is clear that they need to pay 10% of their total dues (not outstanding) by that date.

However, the official said that the DoT is not going to take the first step of either raising the demand on the companies or seeking a legal advice or clarification. If it sees that the companies have not paid the 10% amount by March 31, 2021, only then it is going to approach the court.

As is known, as per the SC order after paying the 10% dues, the operators are required to pay the balance dues over the next 10 years in equal installments.

Meanwhile, Bharti Airtel has also sought from DoT details of the dues circle-wise. The company has written to the DoT stating that since the licence is granted circle-wise, dues are also calculated on the same basis, so for accounting purpose, the company needs to know break-up of the dues circle-wise.