Today, a bench led by Justice LN Rao took note of the earlier order passed by the apex court in the AGR dues matter. The bench observed that the Court has said about "no re-assessment of AGR-related dues could be done."
Sabyasachi Majumdar, Senior Vice President & Group Head, ICRA Limited on ‘Supreme Court’s AGR ruling on the telecom sector’, "The Supreme court has quashed the AGR penalty re-computation request of the telcos, stating that the earlier order clearly states that no-assessment can be done. This will not bode well for the recovery in the sector and is likely to protract the same, given the elevated debt levels and very low tariffs. The industry is staring at high commitments towards debt repayments and DoT payments in the coming few quarters, with next major payments due in March-April 2022. In order to meet these, the industry participants will have to look for avenues of fundraising and/or asset monetisation, in addition to focus on substantially improving the ARPU levels."
Earlier this week, the apex court maintained its stand that AGR dues cannot be recomputed, whereas the telecom service provider namely Vodafone Idea, Bharti Airtel and Tata Teleservices had moved to the SC seeking for rectification in errors and commissions by the Telecom Department vis-a-vis dues demands.
Vodafone Idea had stated that the figures are "not cast in stone" and that the apex court has power to "correct the arithmetic errors". Currently, the telco has the highest AGR liability among other peers aggregating to more than Rs58,000cr.
However, the apex court has said that it has not once, but twice and thrice has informed that "AGR demand can’t be recomputed."
Last year, in September, SC allowed telcos payments in 10 annual instalments commencing from April 01, 2021, to March 31, 2031.
On Sensex, Bharti Airtel closed at Rs548.55 per piece up 0.4%. Vodafone Idea finished at Rs8.36 per piece down by 9.6%, while Tata Teleservices ended at the lower circuit of Rs37.65 per piece down by 5%.