TelecomLive April-2020

AGR Dues www.telecomlive.com 39 Telecom LIVE April 2020 them liberty to approach TDSAT. On August 30, 2007, TDSAT passed the final order accepting most of the recommendations of Trai. In addition, TDSAT gave the telcos some additional relief. It said the revised definition of AGR will be applicable from the date of filing of petition by telcos, instead of a prospective date (recom- mended by Trai). DoT filed appeal against the TDSAT judgment, cross appeals were filed by almost all the opera- tors. Finally, on October 11, 2011, the Supreme Court held that Trai and TDSAT cannot define AGR and ruled out any relaxations after the signing of license agreements by telecom service providers (TSPs). The court said the tribunal can only look at the computation of demands raised by DoT, whether it is in accordance with the licence agreement or not. With this judgment, the writing on the wall was crystal clear. The telcos knew that they would have to pay based on the agreed AGR. Around this time, as per CAG audit report for 2006-07 to 2009- 10, the total unpaid dues of six private telcos on account of LF and spectrum usage charges (SUC) was Rs 5,213 crore. But even if they wanted to con- test legally, they could have paid LF and SUC “under protest” to save on interest, and penalties, which is almost now 70 per cent of the total demand of about Rs 1.75 lakh crore. They chose to delay the payment in the hope that they will be able to manage the system. They preferred to dip into the government's money to expand their businesses - in India and abroad. For computation purposes, the matter came back to TDSAT. But once again, TDSAT, in its order of April 23, 2015, exceeded its juris- diction and went on to redefine AGR. The DoT filed an appeal before the apex court and cross- appeals were also filed by various telcos. Finally, on October 24, 2019, a three-judge bench, in its unanimous order, allowed the appeal in its entirety in favour of DoT. The apex court also criticized TDSAT for getting into the defini- tion of AGR even after its 2011 judgment. Even after the above order, Bharti Airtel and Vodafone Idea instead of paying dues, filed a review petition which the court dismissed on January 16, 2020. Even after this, both the operators filed curative petition, which too was dismissed in February 2020 and the apex court also issued contempt notices. This was the fourth order against the telcos – October 2011, October 2019, Janu- ary 2020 and February 2020. Days before the March 18 order, on March 12, Bharti Airtel chairman Sunil Mittal said that the Supreme Court had simply asked carriers to pay their AGR dues, without specifying the quan- tum. Accordingly, the telco has already paid its entire Rs 13,000 crore AGR dues, based on its self- assessment, to the government, he said. “They said pay full....we have paid full dues...which is about Rs 13,000 crore, and Rs 5,000 crore which is extra,” Mr Mittal said / MTNL and the service tax col- lected by the licensee on behalf of the government from their sub- scribers. After these two exclu- sions, it is called as adjusted GR (AGR). Finally, in 2001, the telcos signed fresh licence agreements agreeing to the definition of AGR. However, in 2003, most of the telcos filed petitions before the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) chal- lenging the definition of AGR. TDSAT pronounced its interim order on July 7, 2006, and said the government should have con- sulted Telecom Regulatory Authority of India (Trai) for defin- ing AGR. The DoT challenged TDSAT's order before the Supreme Court. On September 13, 2006, Trai gave its recommendations to TDSAT. Trai while redefining AGR also said such definitions should be applicable from a pro- spective date. Since TDSAT's order was an interim one and Trai had in the meantime given its recommendations, the Supreme Court on January 19, 2007 dis- missed DoT's appeal and gave Amounts recoverable from major TSPs (in Rs crore) Companies Demand by DoT* Self-assessment by telcos Paid till 6.3.2020 Operational TSPs party to the litigation Bharti Group 43,980 13,004 18,004 Vodafone Idea 58,254 21,533 3,500 Tata Group 16,798 2,197 4,197 Quadrant Televentures Ltd 190 25 1 Reliance Jio 71 195 195 Sub total 119,293 36,954 25,897 TSPs under insolvency Aircel group 12,389 - - Reliance / Sistema (ADA) 25,199 221 5 Videocon Telecommunications 1,376 - - Sub total 38,964 221 5 TSPs not party to litigation Loop Telecom / Etisalat DB 604 - - BSNL 5,836 - - MTNL 4,352 - - Sub total 10,792 - - Grand total 169,049 37,175 25,902 * Total demand has been generally calculated upto FY 2016-17. On this, interest, penalty, interest on penalty has been calculated up to Oct 2019. All dues are subject to revisions.