The Cellular Operators Association of India has shot off an “addendum” to its earlier demand and sought a complete waiver of statutory dues that its members, such as Bharti Airtel Ltd. and Vodafone Idea Ltd., owe to the government, ignoring Reliance Jio Infocomm Ltd.’s contentions.
On Oct. 31, COAI Director General Rajan S Mathews shot off a second letter in as many days to Telecom Minister Ravi Shankar Prasad seeking waiver of the “entire” amount of Rs 1.42 lakh crore due to its principal members Bharti Airtel and Vodafone Idea and other telecom operators “given the poor financial state of the sector.”
On Oct. 24, the Supreme Court ruled that the definition of adjusted gross revenue—used to calculate spectrum charges and licence fees—will also include non-core revenue.
The verdict ended a 14-year-old legal battle but it also meant that mobile operators now stare at over Rs 92,000 crore in dues to the Department of Telecommunications. Of this, Bharti Airtel will have to pay up Rs 21,682 crore and Vodafone Idea will have to pay Rs 28,309 crore.
“However, if such a step (complete waiver of all dues) is not possible, we request that the government waive off the interest, penalty and interest on penalty,” Mathews said in the Oct. 31 letter. “Since the disputed payments go back to accumulation over the past 14 years, we request that the principal repayment of past dues be done over a period of 10 years, with a two-year moratorium.”
The demand made by COAI is exactly the same as the one made in an unsigned paper submitted to the telecom ministry on the day Bharti Airtel Chairman Sunil Bharti Mittal and his brother Rajan Mittal met Prasad and Telecom Secretary Anshu Prakash.
Billionaire Mukesh Ambani’s Reliance Jio, which is also a member of COAI, has been contesting claims of the inability of telecom companies to pay the statutory dues.
Jio says COAI shot off the first representation to the government on Oct. 30 without waiting for its comments. It feels that COAI, for the benefit of some of its members, is using a “threatening and blackmailing” tone in its communication to the government on the non-existent crisis in the sector following the Supreme Court’s AGR ruling.
Jio has separately written to Prasad opposing any bailout to telecom companies at taxpayer’s expense and asserted the COAI should not be considered an association representing the industry.
It has accused COAI of writing to government “under the influence of two of its members in furtherance of their vested interests” and accused the association of acting as a “mouthpiece of two service providers” and harbouring a negative bias towards Reliance Jio.
There was no case for seeking any financial support from the government after the industry exhausted all its legal recourse, it feels.
Mathews in the Oct. 31 letter stated that the support “will go a long way to ensure that the sector can start the path of recovery from the current situation over time and serve the cause of Digital India”.―Bloomberg Quint