Bharti Airtel pays additional `8,004 cr, claims compliance with SC judgment

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By:

ENS Economic Bureau

| New Delhi |


Published: March 1, 2020 12:26:10 am


The company has, so far, paid Rs 13,004 crore and an additional Rs 5,000 crore as the principal, and the interest component of its AGR dues. (Image source: Reuters)

Bharti Airtel on Saturday said based on its self-assessment of the adjusted gross revenue (AGR) to be paid, it had deposited an additional sum of Rs 3,004 crore with the Department of Telecommunications (DoT). In addition to the Rs 3,004 crore, the company has also deposited a sum of Rs 5,000 crore as ad-hoc payment with the DoT to cover any differences that may arise from the reconciliation exercise being undertaken by the ministry.

In a filing with the exchanges, the company said the self-assessed AGR calculation was for the period between FY2006-07 and December 31, 2019, whereas the interest on AGR was paid for up to February 29, 2020. With the payment of these funds, the company said it has fully complied with the Supreme Court’s October 24, 2019 judgment on AGR.

On October 24, 2019, the SC upheld the DoT’s definition of AGR and said since the licencees had agreed to the migration packages, they were liable to pay the dues, the penalty on dues, and the interest on penalty due to delay in payments. The apex court had then given the telcos three months to clear their AGR dues.

Explained

Focus now on what Voda Idea does next

With Bharti Airtel having claimed to pay the entire AGR dues based on its internal calculations, the spotlight is back on Vodafone Idea, which is said to be struggling with raising funds for AGR payments. The company is under the lens of rating agencies which believe that the telco does not have adequate funds to make the payments by 17 March 2020, given lack of clarity on “promoter equity infusion, severe erosion in refinancing flexibility and insufficient cash balance”.

That three-month deadline ended on January 23, before which the telcos had unsuccessfully tried to persuade the DoT to give them more time to pay the dues. Having failed there, the telcos again approached the apex court seeking a review of the October 24 judgment, which was also turned down. The telcos had then filed a modification plea before the apex court, seeking its permission to sit down with DoT and negotiate a timeline. It was during the hearing of this modification plea on February 14 that the top court had come down heavily on the telcos as well as the DoT for not complying with its orders.

Following the SC’s wrath, Bharti Airtel wrote to the DoT offering to pay Rs 10,000 crore by February 20, and did so. The company has, so far, paid Rs 13,004 crore and an additional Rs 5,000 crore as the principal, and the interest component of its AGR dues.

The total payment made by Bharti Airtel is half of the government’s calculations on the AGR dues payable by the company. The DoT has estimated that Bharti Airtel’s needs to pay more than Rs 36,000 crore as AGR dues.Reliance Jio, too, last month cleared all its AGR-related dues amounting to Rs 195 crore well within the Supreme Court’s January 23 deadline.

With Reliance Jio and now Bharti Airtel having paid their self-assessed AGR dues, the spotlight is back on Vodafone Idea, which is said to be struggling to make the payments. The company which owes around Rs 53,000 crore towards AGR-related dues, has paid around Rs 3,500 crore to the DoT. This the company had said, is half of the principal amount of the self-assessed AGR dues.

Top executives from Bharti Airtel and Vodafone Idea have, starting February 14, regularly met various DoT officials, the telecom and the finance minister trying to work out some way from the huge AGR payouts they face. There has been no relief from the DoT so far, even as talks of a possible bailout package being offered to the telecom companies have been doing the rounds.

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