Telecom companies in debt: Government goods, Rs 1.3 lakh crore

The Supreme Court's decision will have a big blow to already-drowned telecom companies: the telecom shares that tangled with the judgment.

The amount includes a license fee of 92,000 crore and a spectrum usage fee of 41,000 crore.

Bharti Airtel pays Rs 21,682 crore, Vodafone 19,823 crore, Reliance Communications 16,456 crore, Idea has paid 8485 crore for license fee.

New delhi date. October 24, 2019, Thursday

The Supreme Court has given a big blow to telecom companies. The court ordered the telecom companies to pay Rs 1.33 lakh crore to the Department of Telecommunications (DOT) during the hearing.

The court will determine how often this balance will have to be paid. Telecom companies sought 6 months to pay the balance.

The telecom department had claimed in the Supreme Court that it had owed Rs 1.33 lakh crore to companies including Bharti Airtel, Vodafone-Idea and Reliance Communication. The amount includes a license fee of Rs 92,000 crore and a spectrum usage fee of Rs 41,000 crore.

During the hearing, Dot told the court that in addition to the termination fee, all revenue received by telecom companies is part of the Adjusted Gross Revenue (AGR).

Telecom companies, on the other hand, argued that non-telecom revenue such as rent, internet income, profit, etc. should not be included in the AGR.

It is worth mentioning that in 2006 the Telecom Settlement and Appellate Tribunal (TDSAT) ruled in favor of telecom companies. The telecom department subsequently challenged the TDSAT decision in the Supreme Court.

In 2008, the court granted interim stay on the TDSAT decision and issued notices to telecom companies. The amount of Rs 41,000 crore includes principal amount, interest and penalties.

A bench of justices Arun Mishra, AA Nazir and MR Shah delivered the crucial verdict in the Supreme Court. According to experts, the news is unfavorable for the telecom sector as there is a debt of Rs seven lakh crore on the telecom sector.

In this case the company's position could be worse. Apart from this, the impact of this decision will also be seen on the banks as the loans given to telecom companies by several private and government banks can become NPAs.

The Supreme Court's ruling is a relief to the telecom department and painful for telecom companies. A Bharti Airtel spokesperson said that we were disappointed with the Supreme Court verdict.

The dispute over the definition of AGR has been going on between 2005 between the telecom department and the telecom service providers. Telecom service providers have spent billions of dollars so far in providing world-class service to customers.

The Supreme Court's decision comes at a time when telecom companies are facing financial crisis. This court ruling will make the financial position of the company worse. There were 15 companies at one time in the telecom sector which has now fallen to just two. The government should review the impact of this judgment and take appropriate decisions.

According to the telecom department, the payment of license fee is pending to pay Rs 21,682 crore to Bharti Airtel, Rs 19,823 crore to Vodafone, Rs 16,456 crore to Reliance Communication and Rs 8485 crore to Idea.

It is worth mentioning that Bharti has debt of Rs 26000 crore on Airtel, 19000 crore on Vodafone-Idea, 16000 crore on Reliance Communication, 2000 crore on BSNL and Rs 2500 crore on MTNL.

What was the dispute between the telecom department and the telecom companies?

New delhi date. 24

The telecom department of the central government believes that all the revenue received by telecom companies besides the termination fee is part of the Adjusted Gross Revenue (AGR). Telecom companies, on the other hand, argue that non-telecom revenue such as rent, internet income, profit, etc. should not be included in the AGR.

It is worth mentioning that in 2006 the Telecom Settlement and Appellate Tribunal (TDSAT) ruled in favor of telecom companies. The telecom department subsequently challenged the TDSAT decision in the Supreme Court. In 2008, the court granted interim stay on the TDSAT decision and issued notices to telecom companies.