Telco bailout will be contempt of SC; will set bad precedent: Jio to Prasad
New Delhi: Continuing its fight for a level-playing field, Reliance Jio has written to Telecom Minister Ravi Shankar Prasad saying a "financial windfall" for Bharti Airtel and Vodafone-Idea by waiving penal action on unpaid statutory dues of the past 14 years will be violative of the Supreme Court's recent ruling and will set a bad precedent for errant companies.
Jio, whose offer of free calls and dirt cheap data on mobile phones since its launch in 2016 helped make India the nation with the lowest telecom tariffs in the world, said the Supreme Court in its October 24 order has clearly settled the base on which statutory levies such as telecom licence fee and spectrum usage charge has to be paid and waiving of interest and penalty on due amounts of the past 14 years will be violative of the judgement. "The judgment records the submission on behalf of the Department of Telecommunications (DoT) to the effect that interest and penalty were being levied strictly as per the contract between the parties and that any reduction, modification or alteration of the interest and penalty provisions contained in the License Agreement would amount to impermissibly rewriting the agreement. This contention was accepted by the Hon'ble Court," it wrote on November 1.
The Supreme Court had on October 24 upheld DoT's contention that non-telecom revenues should be part of the annual Adjusted Gross Revenue (AGR) — a percentage of which is paid to the government as statutory dues. With total liabilities estimated at Rs 1.4 lakh crore, Airtel and Vodafone-Idea, through the telecom sector association COAI, are seeking waiver of at least the penalty and interest on delayed payments, which constitute about half of the total dues, if a complete waiver of past liabilities is not possible. Reiterating its position that telcos have sufficient resources to meet the liability, Jio said the incumbents such as Bharti Airtel and Vodafone-Idea had reaped rich bonanza when they had accepted and moved to a revenue share method of paying statutory dues almost two decades back and no relief on unprovisioned and unpaid past liability should now be entertained.
"While considering the issue relating to imposition of interest and penalty, the judgement deals with elaborate reasoning that covers the pendency of multiple proceedings raised at the instance of the Telecom Service Providers (TSPs) in various forums from time to time for some reasons and concludes that these disputes had not been raised in a bonafide manner, but rather, were solely with the aim to somehow or other evade from making the payment, even on the heads / items on which they had lost in the earlier proceedings," it said.
Jio added that the "claimed inability to meet the payment obligations is not on account of any reasons or an event or an effect that the parties could not have anticipated or controlled."
"Rather, the position that emerges from a plain reading of the judgment is that the licensees have indulged in abuse of the process of Court and deliberately delayed payment of dues on frivolous and legally untenable grounds," it said.
