Supreme Court puts onus of AGR dues of ailing telcos on spectrum users

The Supreme Court has said that telecom operators using the spectrum of ailing phone companies will have to pay their adjusted gross revenue (AGR) dues. The top court, in an observation on Friday, put the liability of paying AGR dues on telcos that have used the airwaves of now bankrupt firms such as Aircel, Reliance Communications, and Videocon.

The apex court has directed the Department of Telecommunications (DoT) to furnish the list of companies that had been using the spectrum since the day they got them. It has also asked the DoT to provide information regarding their AGR dues to fix liability for payment on those who had “traded” or “shared” the airwaves, the Economic Times reported.

As per the court proceedings, if insolvent companies fail to pay their AGR dues, then the telcos that got the spectrum from them will be liable to make the payment. For instance, if Videocon, which is in bankruptcy proceedings, is unable to pay its (AGR) dues, Bharti Airtel, which is using the airwaves of the telco (Videocon) under a spectrum trading agreement, may have to take a hit.

Aircel and Videocon have traded spectrum with Bharti Airtel, while Reliance Communications (RCom) too has shared and traded some of its airwaves with Reliance Jio Infocomm.

Justice Arun Mishra-led SC bench observed that previous dues need to be cleared before any further spectrum transfer, in compliance with spectrum trading guidelines. Referring to the matter of Reliance Jio’s obligation to pay the AGR dues of RCom, Justice Mishra noted that the DoT had not provided the details sought by the court.

Clarifying its stance earlier, Jio, through senior counsel Harish Salve, said that AGR dues, to the tune of Rs 195 crore, have been paid and any further shortfalls, to the extent of use of RCom’s spectrum, will also be settled.

Whilst Airtel, through senior advocate Kapil Sibal, has also clarified that it will have to examine the older arrangements to compute the AGR dues of Aircel and Videocon, that are sought to be passed on to the company. The DoT has sought Rs 1,376 crore from Videocon, and Rs 12,389 crore from Aircel. Business Today