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DoT briefs government panel on telecom woes, AGR crisis

The panel was formed to suggest steps to provide relief in a time-bound manner to the carriers which are facing a Rs 1.3-lakh-crore-plus payout in additional statutory dues after the SC order on adjusted gross revenue.Loss-making Vodafone Idea and...

, ET Bureau|
Nov 06, 2019, 07.44 AM IST
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Talks gather momentum, committee yet to decide steps to heal the telecom sector.
NEW DELHI: A group of officials from the department of telecommunications (DoT) on Tuesday briefed a high-powered panel on the financial state of the industry and the challenges it is facing.

Tuesday’s meeting — the second of its kind – was an “information-gathering exercise by the committee of secretaries (CoS)” to take stock of financial stress in the debt-laden telecom sector, a source said.

The panel was formed to suggest steps to provide relief in a time-bound manner to the carriers which are facing a Rs 1.3-lakh-crore-plus payout in additional statutory dues after the Supreme Court order on adjusted gross revenue (AGR).

“A representation was made to inform the CoS about the situation of the sector. They’re aware of the duress and the debt. We have also given the information on AGR and the fallout that it will have on the sector,” a government official said.

Loss-making Vodafone Idea and Bharti Airtel have been hit hardest by the Supreme Court order backing the government stance to include non-core items while calculating AGR, basis which the telcos pay licence fees and spectrum usage charge (SUC) to the government. The two telcos are cumulatively staring at over ?80,000-crore additional dues to be cleared in less than three months.

Both have sought urgent relief from the government, saying that they will face an “unprecedented crisis” if forced to pay the full amounts. Rival Reliance Jio has opposed any relief in the AGR issue.

“The CoS is far from finalising anything at this point, more meetings will take place,” the official said, highlighting that discussions were gathering pace since the onus of finding solutions for the sector is on the multi-ministerial panel.

ET had reported on Monday that the panel is looking at a repayment period of 20 years for AGR dues, with possibly an initial moratorium to ease the burden on heavily indebted companies. While the total debt of the sector is about Rs 7 lakh crore, incumbent Airtel and Vodafone Idea together have a debt of more than Rs 2 lakh crore.

The panel is headed by cabinet secretary Rajiv Gauba and has officials from key stakeholder ministries and departments. It may also consider a reduction in the total incidence of taxation to help the troubled sector, besides a reduction in levies. The service providers have long been asking for lower taxes on telecom services, which comes to nearly 33% of the overall revenue.
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