Airtel, Vi mention AGR calculation error plea in Supreme Court, court says to hear in 2 weeks

The Supreme Court will hear the case on calculation errors of adjusted gross revenue (AGR) by the telecom department within two weeks. SC’s verdict could be the closure of this chapter of the AGR case wherein telcos-Vodafone Idea, Bharti and (TTSL) have pointed out errors in calculations that have led to what they call as inflated demand of statutory dues by the department.

The case was mentioned in the apex court on Wednesday. The latest in the AGR battle between the telecom department and the operators started when Airtel in January, sought for a modification, clarification or recall of “mistaken orders” that allowed the government to demand Rs 43,980 crore as AGR dues against the telco’s calculation of Rs 13,004 crore. Airtel has so far paid over Rs 18,004 crore of its dues.

Then Vi followed suit and appealed to the top court to allow the Department of Telecommunications (DoT) to consider the telco’s submissions on the calculation errors and rectify them accordingly. Vi has to pay Rs 58,400 crore in AGR dues, of which it has paid Rs 7,854 crore. The telco had self-assessed its dues at Rs 21,533 crore, which the top court had earlier rejected.

TTSL which has sold off its consumer mobility business to Airtel, moved SC with similar grievance. It has AGR dues of Rs 16,798 crore and has paid Rs 4,197 crore and highlighted errors as well.

This is not the first time though that the telcos impacted hugely by AGR dues have highlighted their grievances to both SC and DoT. While its earlier appeals were thwarted by the court, their last batch of letters to DoT on this issue have not elicited any response.

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Any reduction in AGR dues is crucial for Vi, given its weak cash flows, huge debt and need to invest in expanding its 4G network to stem rapid subscriber losses, analysts said. The company is looking to raise Rs 25,000 crore through debt and equity to tide over its financial crisis.

Similarly, Airtel has announced refinancing of Rs 7500 crore via debt instruments such as debentures and bonds. Now this will ultimately leave the operator with more cash in hand for spectrum auction-related expenses and others including AGR dues.

The battle has been going for years but reached a culmination over the last one year.

In March 2020, the top court – while hearing a modification plea of the government which wanted the telcos to be allowed to pay their AGR dues over 20 years – had scrapped any exercise of re-assessment by the telcos; then in July, during the hearing of the modification plea, the court again said no to recalculations. Then finally in September, the top court allowed the government’s plea of AGR payment in instalments, but over 10 years, and according to the dues calculated by the DoT.



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