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When the law does not deliver justice and merely interprets the fine print…

When the legal system does not deliver justice, and merely interprets the fine print, should the government not have the grit (and in this case also the vision) to stand up, and intervene on behalf of the industry? That is exactly what is required from DoT at this juncture.

The Supreme Court on February 14 directed that the telcos collectively must pay the AGR dues of Rs 1.47 trillion immediately. This included all revenues accrued to carriers, including that from non-telecom activities. And if the dues were not paid by the next hearing, on March 17, MDs of the telcos would have to be present in court, with the sword of the possibility of bank guarantees being invoked dangling over their heads.

In fact, the AGR Judgment has implications on all those companies which are not purely telecom companies but are holding telecom licence. Such companies will be required to pay the licence fees on the entire revenue generated by them notwithstanding that the same is arising from non-telecom activities.

That this order has severe ramifications for the sector is not rocket science. And not just for the telecom sector, which apart from the service providers includes towercos and equipment vendors, but also for the banking sector, and the economy in general with large magnitude of debt default, job losses and mayhem at the customer’s end as Vodafone Idea faces an imminent risk of shutdown and what nightmare Bharti Airtel has ahead of it, only time will tell.

There is no denying that the operators, since 2003, when the interpretation of AGR first went into dispute, behaved irresponsibly and let things run their own course. They could have adhered to being compliant and deposited the AGR dues in a timely fashion, as per self-assessment, in the courts, but that is history now.

The statutory dues calculated by the Controller General of Communication Accounts, DoT must be reconciled with each operator’s self-assessment amount, and payment schedule established. Once this hurdle is crossed, it is imperative to quickly jump on the 5G bandwagon too.

There is absolutely no doubt that the telecom sector is a money spinner, transforms business landscapes, and its financial viability is vital for India to reach the USD 5-trillion economy mark by 2024.

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