Will cancel spectrum allocation if telcos don’t pay AGR dues: SC

By Administrator_India

Capital Sands

 

After several rounds of hearings and a year later, the Supreme Court has reserved its judgment on the adjusted gross revenue (AGR) case. On the last day of hearing on Monday, the court observed that if telecom companies are unwilling to pay their dues, it would direct the Union government to cancel their spectrum allocation and licence.

While the court’s verdict on the tenure of paying AGR dues is expected to decide the future of Vodafone Idea, its ruling on spectrum held by telcos under insolvency will be critical for the telecom industry, analysts said.

The judgement on the aspect of additional liabilities, if any, will determine the payout for Reliance Jio and Bharti Airtel for past dues of Reliance Communications, Videocon and Aircel. Reliance Jio had spectrum sharing and trading pacts with RCom and Airtel with Videocon as well as Aircel.

The Department of Telecommunications (DoT), in its submission, said the assessment of demand for payment of dues by Airtel, on behalf of Videocon, can be done once SC finalises its view on spectrum sharing and trading.

According to the spectrum trading guidelines, the seller of airwaves must satisfy all pending dues before the transaction. On non-payment of dues by the seller, the burden of dues is on the buyer, the court had observed.

Appearing on behalf of Bharti Airtel, senior advocate Kapil Sibal said if the liability of past dues of Videocon was to be cast on Airtel, the DoT should have clarified long back.

DoT told the court that so far no demand had been raised against Reliance Jio and Bharti Airtel for past dues of RCom and Videocon. The assessment of their liability for past dues of RCom and Videocon was under process, DoT said.

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