India's Supreme Court deals a hammer blow to the country's beleagured telecoms sector
India’s highest court has also questioned why the Department of Telecoms has allowed the country’s telecoms giants to self-assess the amount they owe
India’s Supreme Court has said that the country’s beleaguered telcos must make full and immediate payment of their outstanding AGR dues, as it quashed a government application to allow telcos to make repayments over a 20 year period.
The country’s highest court also questioned why the Department of Telecoms had allowed telcos to “self-assess” the amounts they owed, rather than enforcing the repayments of the amounts previously mandated by the court.
In October 2019, the Supreme Court ruled that telcos must adjust the way in which they calculate their adjusted growth revenues (AGR), in a ruling that saddled the industry with a total of $193 billion (1.43 lakh crore rupees) of debt, spread across at least 15 major telcos and internet service providers.
The hardest hit of India’s big three telcos has undoubtedly been Vodafone Idea. Earlier this week Vodafone Idea completed the payment of $923 million (6,854 crore rupees), which it claimed represented the total principal amount of its outstanding AGR dues. However, Vodafone Idea’s own calculations show its total AGR related liabilities, including penalty charges and fees, amount to around $2.9 billion (21,533 crore rupees). The DoT has claimed that it believes Vodafone Idea owes as much as $7.1 billion (53,000 crore rupees).
The Supreme Court has called the DoT’s decision to allow telcos to self-assess a “sheer violation of court orders,” according to a report in The Economic Times of India.
“Is the officer allowing self-assessment superior to us,” the three judge committee enquired.
“If you want us to be harsh, we will call all telcos’ MDs and send them to jail,” they added.