Telecom firms await SC verdict on AGR dues; judgment likely this week

The telecom business is eagerly awaiting Supreme Court docket judgement on the modified gross revenue, envisioned this week. Apart from according its assent to a relaxed payment program to spend the AGR dues, the SC verdict is also likely to seal Vodafone Idea’s upcoming.

The business, which is reeling under mounting losses, will come to a decision its upcoming system of action the moment the apex court pronounces its judgment on the issue. The Division of Telecommunications experienced sought a twenty-year payment timeline for the payment of AGR dues by the business, which was rebutted by SC.

“If the Apex Court docket decides on a fifteen-year repayment tenure, it would pose a grave problem for the financial debt ridden VIL (Vodafone Thought Ltd). Repayment of these expenditure would involve larger tariffs, value personal savings, and equity funds infusion. Also, most monetary establishments are likely to refrain from lending substantial amounts of income to VIL,” Sonam Chandwani, Controlling Lover at KS Lawful & Associates stated.

Nonetheless, some gurus sense that the twenty-year moratorium period of time in spectrum payments may possibly enable VIL endure if tariffs improve and divestments realize success. Nonetheless, attaining back the loyalty of exiting shoppers might be a problem in the next number of quarters.

Afterwards each Vodafone Thought and Bharti Airtel sought a fifteen-year timeline for the payment. SC will choose a ultimate decision on the plea.

ALSO Browse: Will terminate spectrum allocation if telcos really don’t spend AGR dues: SC

A further issue that the leading court will have to see before it finalises its decision on the payment program is the tenure of the spectrum licenses held by the business.

Lawful gurus sense that even if the licenses lapse, the legal responsibility to spend past dues does not stop, in particular if they are statutory liabilities.

SC concluded listening to the AGR scenario on August 24, just about a year following its verdict on the definition of the AGR.

SC in Oct 2019 delivered the verdict on the AGR difficulty for calculating authorities dues of telecom companies these as licence rate and spectrum use charges.

Following the leading court experienced rejected pleas by Vodafone Thought, Bharti Airtel and Tata Teleservices searching for overview of the judgement which widened the definition of AGR by which includes non-telecom revenues, the DoT experienced in March moved a plea searching for staggered payment in excess of twenty decades.

DOT experienced lifted the AGR dues to the telecom companies following the Supreme Court docket crystalized the definition of AGR, similarly it can be done for the dues from bankrupt corporations.

SC will pronounce the judgement on the component of additional liabilities, if any, on Reliance Jio and Bharti Airtel for past dues of Reliance Communications, Videocon and Aircel.