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DoT Moves Supreme Court To Seek Rs 33,000 Crore Spectrum Dues

The telecom department has moved the Supreme Court for approval to secure dues worth almost Rs 33,000 crore from all operators toward licence fees and spectrum usage charges, saying existing bank guarantees aren’t enough to cover the “huge public money” at stake. However, telcos fear such a step would impose a higher financial burden on them.

The Department of Telecommunications filed two separate but identical petitions on September 13, claiming that fresh bank guarantees for Rs 28.70 crore and Rs 32,655.58 crore are needed from the operators and pleading with the court to ensure that the “government’s interests are secured”.

There is huge public money at stake” and even with existing financial bank guarantees and withholding the performance bank guarantee of the licensee companies, it is “not adequate security towards its outstanding assessed annual license fee and SUC dues,” DoT said in the petitions. A decision favouring DoT would mean additional financial stress on operators already reeling under heavy debt amid eroding revenue and profitability, telcos said.

“This will add to the financial burden of the operators if the court decides that more bank guarantees are needed,” said a senior industry executive who did not want to be identified.


For Reliance Communications, a decision favouring DoT could add to its financial liabilities and further delay the sale of its spectrum to Reliance Jio Infocomm. The Tatas may need to recalculate the liabilities that the group needs to assume while seeking approval to sell Tata Teleservices Ltd’s consumer mobility business to Bharti Airtel.

RCom, Jio, Airtel, Vodafone Idea, Tata Teleservices and Aircel did not immediately respond to queries emailed by ET. DoT has been fighting to recover SUC dues and licence fees for a while, with some Rs 78,000 crore stuck in litigation in a sector burdened with over Rs 7 lakh crore of debt. The court is considering the definition of adjusted gross revenue (AGR) — the revenue derived from licensed services — which forms the basis of calculating annual fees such as SUC and licence fees.

DoT said in its latest petitions that it cannot enforce demands for dues until the apex court passes its final order and that because of this, it “continued for more than a year without any recovery.” “It has now become necessary for the appellant/applicant to approach this Hon. Court to modify the interim order so that the bank guarantees are given or some arrangement is made so that the government interests are secured,” DoT said in the petitions.

The legal battles have delayed mergers and if DoT gets the apex court’s approval, it may impact ongoing deals. RCom, which has sold its fibre network and switching nodes to Jio for Rs 5,000 crore, is stuck in a separate legal tussle with DoT over spectrum dues that has delayed its spectrum sale to Jio. RCom is in a rush to pay off its 39 lenders and pare debt of Rs 46,000 crore, a big part of which will be generated from the sale of spectrum to the Mukesh Ambani-owned company. The complete deal, including the sale of towers to Jio and land to Canada’s Brookfield, is expected to generate some Rs 18,000 crore for RCom.

Tata Teleservices has agreed to sell its mobility business to Sunil Mittalowned Airtel while its enterprise business is expected to be picked up by group company Tata Communications. While Tata Sons has informed DoT that it will bankroll most of the dues incurred by Tata Teleservices, any additional amount would add to the burden of the conglomerate trying to exit the telecom sector. – Gadgets Now

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