SC asks Govt to cancel license, spectrum if dues are wiped out

Telecom service provider, Bharti Airtel bounced back on exchanges after the Supreme Court adjourned hearing on adjusted gross revenue. While, Vodafone Idea continued to witness huge buying sentiment. In the latest bench proceeding, the court has asked the government to cancel spectrum if telcos are unwilling to pay AGR dues.

At around 3.13 PM, Airtel stock was trading at Rs528.75 per piece surging by 1.68% on Sensex. In early deals, Airtel was among top underperforming stock as it clocked an intraday low of Rs508.50 per piece on the index.

Meanwhile, Vodafone Idea stock trades at Rs9.09 per piece surging by 6.57%. The stock has touched an intraday high of Rs9.74 per piece on Sensex.

According to a CNBC-TV18 report, SC observes that the government should move to cancel license, spectrum if dues are being wiped out. If telcos are unwilling to pay, we will direct to cancel the spectrum allocation.

Last week, the court said telcos using spectrum are liable to pay AGR dues. That means, Airtel will have to pay AGR dues of bankrupt Videocon Telecommunication.

An Economic Times report on Friday said, the three-judge bench, headed by Justice Arun Mishra, observed that the past dues need to be paid before transfer of spectrum. If Videocon doesn’t pay, Bharti Airtel, which acquired Videocon spectrum will have to pay, the bench said as per media reports.

However, the report also said, the solicitor for Bharti Airtel, pointed out that the company has not received any demand from the government in this regard. He added that the spectrum is recognised as assets of telcos and even used as collateral. And, if that is derecognised, even banks will refuse to give a loan.

Airtel in 2016, bought rights to use 2×5 MHz spectrum in the 1,800 MHz bands from Videocon for consideration of Rs4,428cr. The spectrum was sold in six circles by Videocon namely Bihar, Gujarat, Haryana, Madhya Pradesh, UP (East) and UP (West).

Reportedly, it is also known that, Vodafone Idea has informed its lenders that despite financial constraints the company will pay accrued interest on due loans after availing the six month moratorium which is set to end on August 31.

Meanwhile, Airtel and Vodafone eye clarity over staggered AGR payment. However, the court is yet to provide any clarification on this. Both the telcos are seeking 15 years timeframe for AGR payment, however, the government had given petition for 20 years timeframe for private telcos. India Infoline