About ₹80,000 cr is stuck with the Telecom Department due to litigation, delayed merger and acquisition that has dissuaded overseas investors. Telecom Department put forth suggestions to the Law Ministry for ease of operations with the Telecom operators.
‘The telcos have a different point of view and this has led to a large amount of Rs 75,000 crore- Rs 80,000 crore, including penalties and interest, that’s stuck in legal battles,’ an official told ET.
Suggestions include unifying various charges levied on the operators and settling cases at a faster pace.
Multiple charges imposed
Disputes often relate to the various charges imposed on operators. This includes licence fees, spectrum usage charges (SUC) and one-time spectrum charges (OTSF). While licence fee and SUC are dependent on adjusted gross revenue (AGR), the courts have not properly defined AGR. Due to this other levies are challenged and stayed in courts. Over ₹25,000 cr stuck in litigation pertain to SUC alone.
Manoj Sinha, the Telecom Minister also agreed upon that AGR must be defined ‘rationally‘.
M&A Disputes
Telecom Department directs operators to clear dues before approving their mergers. Operators on the other hand move courts seeking a stay on dues that only prolongs the processes for clearance. This affects overseas investments.
‘When we raise money in global bond markets, investors think twice before agreeing. Because why would you invest in a company knowing that thousands of crores are stuck in legal battles with the government,’ a senior executive at a major telcos said.
‘These large amounts are not surprising since every due amount has a penalty attached to it,” said Rajan S Mathews, director general of the COAI lobby group. The higher litigation costs adds another problem to the balance sheet.
Dues owed
Bharti Airtel owes ₹8,243.85 cr. Reliance Jio Infocomm owes ₹116.51 crore. Reliance Communications owes ₹2,594.45 cr while its subsidiary Reliance Telecom owes ₹519.32 cr.