DoT may encash bank guarantees of telcos on not paying AGR dues
Airtel, Voda Idea, Tata Tele likely to pay AGR dues today: Telecom Department source
New Delhi: The government may take action in terms of encashing the bank guarantees of Telecom Service Providers (TSPs) in case they "immediately" fail to pay their spectrum usage charges and the license fees in compliance with the Supreme Court order of October 24 last year.
In letters to different telecom circles, the zonal telecom units of the Department of Telecom (DoT) have not explicitly raised the issue of encashment of bank guarantees in the communications to the TSPs, but they have mentioned "necessary action under the Licensing Agreement without any further notice" which indicates towards two courses of action — either encashment of bank guarantee, or cancellation of license.
In a letter to all the telecom service providers under Gujarat telecom region, the DoT's Office of the Controller of Accounts has said "with respect to payment of License fee and spectrum usage charges in compliance with the Supreme Court judgement of October 24, 2019, You are directed to make an immediate payment of license fee and spectrum usage charges (SUC) along with interest, penalty and interest and penalty (if applicable) for the Gujarat Telecom Circle. If dues are not paid immediately, necessary action will be taken in terms of the provisions of the license agreement without any further notice. This may be treated as 'Most Urgent'".
Similar letters have been issued by the Rajasthan as well as the Kolkata Telecom Circles of the DoT to the TSPs under their respective circle.
Meanwhile, telecom operators Bharti Airtel, Vodafone Idea and Tata Teleservices are likely to make payment for adjusted gross revenue (AGR) dues on Monday to avoid stringent punitive action from the Telecom Department, according to an official source.
The three companies are jointly liable to pay dues of over Rs 1 lakh crore, but they have informed the Department of Telecom (DoT) of making only partial payment, as per their representatives.
"Airtel, Vodafone Idea and Tata Teleservices have said that they will make payments on Monday. DoT will take action after evaluating the amount paid by them," an official source said.
Earlier on Friday, Bharti Airtel offered the DoT to pay Rs 10,000 crore by February 20, but a DoT official said that the department can't grant any extension.
Vodafone Idea on Saturday said that it is assessing the amount that can be paid towards AGR dues, even as it flagged concerns over the continuation of its business.
Telecom operators are collectively liable to pay Rs 1.47 lakh crore in AGR dues as per the Supreme Court order dated October 24, 2019. The deadline to pay the amount ended on January 23, but none of the telecom operators, except Reliance Jio, paid the amount.
Even state-owned BSNL and MTNL did not pay the dues.
As per the last available estimates, Airtel owes nearly Rs 35,586 crore, including licence fee and spectrum usage charges, to the government.
Vodafone Idea is staring at dues worth Rs 53,000 crore, which includes up to Rs 24,729 crore of spectrum dues and another Rs 28,309 crore in licence fee. Tata Teleservices owes around Rs 13,800 crore, BSNL Rs 4,989 crore and MTNL Rs 3,122 crore.
Out of Rs 1.47 lakh crore, around Rs 1.13 lakh crore is likely to be recovered, as other companies, which are liable to pay AGR dues, have folded up their businesses.
Reliance Communications and Aircel are going through insolvency proceedings.
The apex court on Friday came down heavily on the Telecom Department for not taking steps to recover statutory dues, estimated to be around Rs 1.47 lakh crore from operators.
The DoT issued fifth and final notice to telecom operators on February 14 for making payment on the same day, but none of the companies paid the dues.
When asked about telecom operators having sought time to assess the amount they have to pay, the DoT official said that the court gave them three months to do so and even after missing January 23 deadline telecom operators had sufficient time to calculate their dues.
"Before the due date, DoT has sent telecom operators 4 notices and reminders to pay to avoid punitive action under license condition. After court order on modification plea, telecom players are not left with any excuse to delay the payment and the DoT can take action against them without serving any further notice," the source said.
The apex court pulled up telecom operators and the government on non-payment of AGR dues despite its order. It has asked managing directors and directors of the company to be present in person before court on the next hearing, scheduled for March 17, in case there is violation of its order in the AGR case.
Public sector companies, that do not sell telecom services, owe DoT around Rs 2.65 lakh crore, with GAIL India alone owing around 65 per cent of the total amount. However, these PSUs have the option to approach court for a legal recourse.