Will the AGR Negotiation Favor the Telcos?
The Prime Minister's Office and Finance Ministry have held separate meetings with Department of Telecom over working out a solution on the AGR decisions of the Supreme Court where the telecom operators have to pay a hefty amount of Rs 1.3 lakh crore overall to the government as dues.
AGR is Adjusted Gross Revenues which includes all licensed revenues of a telecom firm not necessarily originating only from mobile or landline services.
It now includes all incomes likes towers, ISP licenses, rentals as per the apex court order which has supported the DoT computation and this is now a 14-year-old dues amount which has jacked up the payout by telcos like Airtel and Vodafone Idea.
Highly placed sources said the PMO and Finance Ministry have held meetings with DoT but no possible way or solution for giving any relief to the telcos over the payment has emerged.
The Telecom Secretary attended the meeting with the PMO last week. Senior DoT officials were there in the Finance Ministry meeting. The newly appointed panel-led by Cabinet Secretary also met last week for the first time for looking at sectoral levies relief and they too discussed the AGR issue though its terms of reference is not on the AGR issue discussion.
Sources said as the Secretary panel starts meeting more, there is expected to be some direction which can be followed and only PMO will take that decision after inputs from the secretary panel, Finance Ministry, Law Ministry and Department of Telecom.
Telecom Ministry has, however, made it clear to these ministries, PMO that insistence on payment by these telcos could land them in NCLTs where recovery of government dues would drag again for years and these telcos have taken huge loans of over Rs 3 lakh crore from banks for previous spectrum auction which they would not be able to return to the banks and NPAs would rise as a result.
There would be extreme difficulties for 70 subscribers of these telcos if they shut down. Other than that, Indian telecom sector would get an extremely rough image in the global map.
Sources also added that telcos individually and represented by industry have met telecom secretary recently over this. In the industry meeting, Jio was not present.
As on possibilities of a direction, officials said waiving of penalties and interest is not easy as it directly intervenes the Supreme Court order and the whole court case was over that. So discussion have to be threadbare on what is realistically possible without touching the Supreme Court order and at the same time it is also true that these telcos would not survive such huge payments and there is only 3 months since October 24 when this order came.
A panel of secretaries led by Cabinet Secretary Rajiv Gauba will take stock of financial stress in the debt-laden telecom sector and suggest steps to provide relief to carriers such as Vodafone Idea and Bharti Airtel in subsequent meetings.
Since the AGR issue has cropped up due to the Supreme Court order where Airtel and Vodafone Idea are facing dues of up to Rs 1.3 lakh crore as additional statutory dues.
Airtel and Vodafone will have to pay about Rs 80,000 crore, under the order, making their operations unviable and if spectrum fees are added, the figure will touch Rs 1.35 lakh crore.