AGR crisis: Airtel files review petition in SC for interest fee, penalty waiver

Bharti Airtel on Friday filed a review petition in the Supreme Court for the waiver of interest fee and penalty in the Adjusted Gross Revenue (AGR) case, which put a burden of Rs 35,586 crore on the company.

The Sunil Mittal-led telecom firm has filed an appeal for the interest and penalty waiver and not on seeking extension, news agency IANS quoted sources as saying.

As per the law, a review petition is to be filed within thirty days from the date of judgment. On October 24, 2019, the Supreme Court upheld the Department of Telecommunications' (DoT) demand that non-telecom revenues should be part of the AGR. As a result, Airtel has to pay Rs 35,586 crore to the government, of which Rs 21,682 crore is licence fee and another Rs 13,904 crore is the spectrum usage charges (not including the dues of Telenor and Tata Teleservices).

Meanwhile, Vodafone Idea, the country's largest telecom operator in terms of subscribers, has an outstanding due of Rs 53,038 crore, which include Rs 28,309 crore in licence fee and Rs 24,730 crore in spectrum usage charges.

Also Read: 2-year spectrum moratorium can't solve telcos's debt problem: analysts

As per the court order, the telcos have to clear the dues within three months, i.e. January 24. However, in a respite to the telecom operators, the Union Cabinet on Wednesday approved a two-year moratorium on payment of pending spectrum dues.

According to market analysts, the government's decision to grant a two-year moratorium on spectrum payments will provide near-term cash flow relief, especially to Vodafone Idea, but the move by itself may not be enough to address leverage concerns of the troubled telcos.

Also Read: Do Vodafone-Idea, Bharti Airtel have the money to deal with Rs 1.36 lakh crore AGR blow?

Credit Suisse in its report on Thursday said that while deferment of spectrum auction payment is in line with its expectations, "no decision on license fees reduction is clearly negative".

Weighed down by AGR provisioning, Bharti Airtel reported a highest-ever quarterly loss of Rs 23,045 crore during the second quarter ended September 30, 2019. The company has provided Rs 28,450 crore as a charge for the quarter with respect to the licence fee as estimated based on the Supreme Court's verdict.

Edited by Chitranjan Kumar