Airtel refused to pay Videocon AGR dues: DoT

The Department of Telecommunications (DoT) has told India’s apex court that telecom major Bharti Airtel has refused to pay the adjusted gross revenue (AGR)-related dues of defunct telco Videocon Telecommunications (VTL), whose spectrum was acquired by the Sunil Mittal-led carrier in 2016.

In an affidavit filed in the Supreme Court on Wednesday, DoT said that in line with its order of September 1, 2020 on AGR dues, it had raised a demand to recover Rs 1,376 crore worth of Videocon’s dues from Airtel, which the latter has declined to pay.

“…DoT has requested BAL (Bharti Airtel) vide letters dated 7.10.2020 and 24.2.2021 to make the payment of AGR related dues of M/S. VTL (Videocon Telecommunications). In its response, Airtel, through letters dated 16.10.2020 and 4.3.2021, said that DoT’s demand has “no basis in law” and that Airtel cannot be held responsible for Videocon’s past dues given that the buyer of spectrum is not responsible for dues which were ‘known’ at the time of trade.

As per the DoT affidavit, Airtel added that contrary to its current stance, DoT had never raised such demand from Airtel in the past and maintained its position that these dues were solely recoverable from Videocon. “…given the clear and categorical findings of the Hon’ble Supreme Court, the trading guidelines issued by DoT and DoT’s own understanding, along with the fact that such demand was never raised on Airtel, is ample testimony to the fact that Airtel is not liable for any outstanding dues of Videocon pertaining to the outstanding AGR dues. i.e. License Fees and Spectrum Usage Charges of M/S Videocon,” Airtel said, as per the DoT affidavit.

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Videocon had sold rights to use spectrum in the 1,800 MHz band in six circles to Airtel in 2016 for Rs 4,428 crore. For operational telcos, SC directed that they must pay 10% of the total AGR dues as demanded by DoT by March 31, 2021 and the remainder in equal instalments every financial year up to March 31, 2031.

But, Vodafone Idea (Vi), Airtel and Tata Tele have said that they have already paid more than 10% of their total AGR dues and don’t need to pay anything by March 31, 2021. However, DoT’s interpretation is that the court meant 10% of the remaining AGR dues when it asked the operators to pay that much by end of FY21 as it was aware of the payments they already made. DoT though didn’t seek clarity on the different interpretations of the government and the telcos over the timelines of the first instalment in Wednesday’s affidavit.

Airtel, Vi and Tata Tele have so far paid over Rs 18,000 crore, Rs 7,854 crore and Rs 4,197 crore, respectively, in late 2019 and early 2020. Their respective total AGR dues are Rs 43,980 crore, Rs 58,254 crore and Rs 16,798 crore. Airtel believes it doesn’t need to pay any instalments for four years, while Vi said it needs to pay the next instalment only by March 2022.

In its report on other telcos, including bankrupt ones, and the status of their complaince, DoT has said that Aircel has not complied with the SC’s AGR order because it did not reinstate the bank guarantees worth Rs 34.7 crore which were encashed in 2018 but were supposed to be kept alive until all dues are cleared. Aircel, which is in the midst of bankruptcy proceedings, owes DoT Rs12,389 crore. Aircel, on its part, responded that those bank guarantees were encashed with respect to deferred spectrum payments and must not be construed under the AGR order which strictly involves payments for license fee and spectrum usage charge.

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A three-judge bench of the Supreme Court had ruled on September 1 that the National Company Law Appellate Tribunal (NCLAT) will decide whether the right to use the spectrum held by bankrupt telco Aircel can be transferred while its statutory dues are pending. Basis the same, DoT had moved the NCLAT challenging Aircel’s resolution plan and the matter is sub-judice.



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