No relief: DoT notice asks telcos to pay AGR dues in 3 months

Since public sector undertakings/departments like GAIL, PowerGrid, Railways, etc have telecom licences, the payment notice will apply to them also

The department of teleco-mmunications (DoT) on Wednesday sent out notices to all the telecom operators and internet service providers to pay their licence fee and spectrum usage charge dues to the government as per the definition of what constitutes adjusted gross revenue given by the Supreme Court in its order dated October 24.

“It is submitted that the Supreme Court while delivering the judgment dated 24.10.2019 also ordered as follows: We give three months’ time to deposit the amount, which is due and compliance be reported,”, DoT’s letter issued on November 13 read. This means that the operators have time till January 25, 2020 to pay their dues which totals to around Rs. 1.3 lakh crore.

However, if the dues of the standalone Internet service providers are included, the total amount could go up to Rs. 3 lakh crore.

Since public sector undertakings/departments like GAIL, PowerGrid, Railways, etc have telecom licences, the payment notice will apply to them also since it is marked to Internet Service Providers Association of India (ISPAI) also directing that the association needs to inform all its members in this regard. While PowerGrid is still a member of ISPAI, GAIL and railways were its members till last year.

The DoT letter further reads, “It is the responsibility of the licensees to pay their licence fee and other dues after carrying out their own assessment as prescribed in the licence agreement(s). You are therefore directed to make the payment in accordance with the order of the Hon’ble Supreme Court dated 24.10.2019 and submit the requisite documents to ensure compliance within the stipulated time frame”.

It maybe noted that the telecom operators are scheduled to file a limited review petition on Friday in the Supreme Court regarding the payment of dues, seeking some kind of relief on waiver of interest, penalty, and interest on penalty and maybe seek more time to make the payment.

The basic premise of the SC order is that all companies having a telecom licence need to take into account while calculating the adjusted gross revenue, all their revenues, including those coming from non-telecom licence businesses for payment of licence fee and spectrum usage charge. Telcos pay a licence fee of 8% of their adjusted gross revenue and SUC ranging between 3-5%.

Post the SC order, the government set up a secretaries panel under the chairmanship of the Cabinet secretary to see what kind of relief package can be drawn up for the financially stressed telecom operators.

While the government is looking at some cut in the licence fee, spectrum usage charge and a two year moratorium on payment of deferred spectrum installment, sources have indicated that some kind of relief — payment in installments stretched over 20 years — on the payment of licence fee and SUC as a result of the SC definition of what constitutes AGR dues, can also be offered.

However, with the DoT letter now going out to the operators, sources said any relief on the AGR payment part can only be offered if the operators are able to seek the same by the SC after they file their limited review petition.