Non-Telecom Companies Also Affected The ripple of the AGR decision passed by the Supreme Court on October 24 has passed on to other industries as well. Other non-telecom companies such as oil corporations, railways and others have also been affected and have been slapped with massive dues. As such, Oil minister, Dharmendra Pradhan has expressed his views hoping that the decision would not affect these companies. The dues on the shoulders of the non-telecom companies in the AGR matter are well over Rs 3 lakh crore. Pradhan remarked about this, “We are discussing the matter with the Department of Telecommunications (DoT),” Pradhan said Thursday. He said the core business of public sector units (PSUs) such as GAIL, Oil India and Power Grid Corp of India Ltd (PGCIL) was not telecom and the current issue was probably a result of some “communication gap.” AGR Matter Drags Down Telecom Industry The matter on which verdict was passed on October 24 was going on in the Supreme Court since the last 15 years between the telecom companies and the government. Finally, the Supreme Court passed its verdict, saying that the definition of AGR would include non-core items as well. This means that while the companies calculate AGR, the revenue from non-telecom streams would also be considered. Since the license fees, Spectrum Usage Charges (SUC) and other levies like the USO fund is calculated over the AGR, the increase in AGR also led to an increase in these dues as well. Now the only thing hurting the telecom companies is not the dues themselves. The penalties, interests and the interests on these penalties make up for more than 75% of the amount which these companies owe to the government. However, a little relief has come from the government, and although it does not affect the quantum of the dues, but the telecom companies have received a payment moratorium of 2 years for Rs 42,000 crore. Telcos Expecting Some Relief from SC While Bharti Airtel has to pay around Rs 35,500 crore to the DoT in AGR dues, Vodafone Idea is neck-deep under Rs 53,000 crore worth of dues. The industry-wide quantum for these dues racks up to be Rs 1.47 lakh crore. Owing to these, both of the telecom companies have posted massive losses in their previous quarters. To make up for these, Bharti Airtel has even gone ahead and conducted a $2 billion share placement with private equity holders. However, with the matter now in SC, the telecom companies are expecting some relief.
