Telecom companies have been desperately waiting for a bailout package. (Photo Credit: File Photo)
A panel of top government officials on Friday pored over option to give subsidised loans to beleaguered telecom firms on condition that they upfront pay a fifth of their dues but no decision could be arrived at, sources said. With Vodafone Idea Ltd expressing inability to pay over Rs 53,000 crore in dues, the Digital Communications Commission (DCC) met on Friday to look at options forwarded by the industry including staggering payment of three-fourth of dues over 16 years with a nominal interest rate, or the defaulting firms issuing bonds and warrants against the outstanding.
The Supreme Court earlier this month directed telecom firms to comply with its October 24, 2019 judgment upholding the Department of Telecommunication's (DoT) definition of adjusted gross revenues (AGR). Accordingly, statutory dues are to be paid after including non-telecom revenues and the DoT estimates this amount to be about Rs 1.47 lakh crore, recoverable from 15 companies.
Any relief proposal can only be implemented with the consent of the apex court. Government officials said more details are required for reconciliation of data on statutory dues.
In a day of hectic parleys at the DoT, Vodafone Idea (VIL) CEO and MD Ravinder Takkar also met Telecom Secretary Anshu Prakash but refused to comment on the details of his discussion.
Telecom companies have been desperately waiting for a bailout package from the government after a Supreme Court order put their statutory liabilities at Rs 1.47 lakh crore, and all eyes were on the DCC meet for the much-needed breather to fix the AGR imbroglio.
In fact, just days ahead of the Friday meeting of DCC, Vodafone Idea - which is the most vulnerable of the lot - told the government that it would not be able to pay the full dues unless state support is extended to survive the crisis.
VIL had made a strong plea for setting off Rs 8,000 crore of GST credits, a three-year moratorium on payment of the remaining amount which should be staggered over 15 years at a simple interest rate of 6 per cent, drastic cut in licence fee and fixing of a minimum price of calls and data. While telecom department officials insisted that DCC meeting on Friday did not focus on AGR issues but rather on project implementation for PPP on Bharat Net project, a source present at the meeting said no decision on telecom relief was taken at the meeting although discussion did take place.
DCC, the highest decision-making body of the government on telecom, discussed the issue and looked at options at the meeting which lasted two hours. Further discussions are needed, and the DCC is likely to meet again in the coming days but no date has been fixed for the next meeting, they said. The telecom department is awaiting more details required for reconciliation of AGR data, sources added.
The DCC includes CEO of Niti Aayog, and secretaries of Ministries of Electronics and IT, DoT, Department of Economic Affairs, and Department for Promotion of Industry and Internal Trade, besides other senior officials of the telecom department. VIL, which had last week paid Rs 3,500 crore to the government - still only seven per cent of its total dues - in a recent letter to the Department of Telecommunications (DoT) said it is "not in a sound financial state" to settle the liability and sought "urgent support from the government".
The Cellular Operators' Association of India (COAI), in a separate, almost similar letter, also urged the government for easier terms for payment of dues by telcos including loans at lower rates to settle liability, as also an urgent implementation of floor prices for call and data.
The embattled industry is aggressively pitching for cut in licence fee to three per cent from the current eight per cent, and has also sought reduction in spectrum usage charges (SUC) to bail out of what it describes as an unprecedented crisis. Blaming the below-cost pricing of telecom services, compelled by competitive pressures as being the root cause of financial stress, VIL has sought immediate implementation of floor price in tariffs.
It has said a floor price needs to be immediately made effective, say from April 1, 2020 to ensure that the sector is fully sustainable and in a position to pay deferred spectrum and AGR dues and still invest to create world-class network and services. VIL Chairman Kumar Mangalam Birla has, in the past, made it amply clear that the company will fold if it is forced to make payment of over Rs 53,000 crore dues. Birla has held multiple rounds of discussions with the finance minister and the telecom minister over the last few days to explore options to keep the company afloat.
In all, as many as 15 entities owe the government Rs 1.47 lakh crore -- Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges. The Supreme Court earlier this month rejected a plea by mobile carriers such as Bharti Airtel and VIL for extension in the payment schedule and asked them to deposit an estimated Rs 1.47 lakh crore in past dues for spectrum and licences.
Airtel has so far paid Rs 10,000 crore against DoT estimated dues of over Rs 35,000 crore, while Tata Teleservices has paid Rs 2,197 crore as full and final settlement for all its dues. As it is, DoT officials have made it clear that any relief extended to companies like VIL would be contingent upon them making additional payments. In the case of Tata Teleservices, officials maintain that the department is not satisfied with the Tatas' calculation of its overall liabilities (Rs 2,197 crore against the government's preliminary assessment of about Rs 14,000 crore) and will be sending a notice to the company soon.