Left Menu
Development News Edition

Grant 3-year moratorium, extended timelines for payment of all dues: COAI to govt

Grant 3-year moratorium, extended timelines for payment of all dues: COAI to govt

The government should grant telecom companies a three-year moratorium followed by an extended timeline for payment of all statutory dues at easier interest rates, as the telecom sector is reeling under massive losses after the Supreme Court ruling on AGR liabilities, COAI said on Monday. Cellular Operators Association of India (COAI) Director General Rajan Mathews told PTI that operators need "oxygen" and urged the government to take a call on debt restructuring of all the dues that telecom operators owe to the government.

Mathews said most 4G licences have 11-year validity left, and that the government could pack in another 10 years, thus allowing operators to pay back all the outstanding dues spread over the entire licence period. "It is also time to redefine AGR (adjusted gross revenue) prospectively," Mathews said.

The telecom industry has been haemorrhaging, with combined losses of listed mobile network firms surpassing Rs 1 lakh crore in the September-ended quarter. Last week, India's two leading telecom operators Vodafone Idea and Bharti Airtel reported a combined loss of Rs 74,000 crore for the second quarter ended September 2019, mainly on account of statutory dues arising from the recent Supreme Court order on AGR.

The apex court upheld the government's position of including revenue from non-telecommunication businesses in calculating the annual AGR of telecom companies, a share of which has to be paid as licence and spectrum fee to the exchequer. The ruling over statutory liabilities has triggered a rush for provisioning by telecom companies. While Vodafone Idea posted a loss of Rs 50,921 crore, the highest-ever quarterly loss by any company in India, Airtel reported a loss of Rs 23,045 crore.

On Friday, Reliance Communication posted a consolidated loss of Rs 30,142 crore for the July-September 2019 period due to provisioning for liabilities after the Supreme Court ruling on statutory dues -- marking second-highest loss posted by any Indian company till date. Airtel, Vodafone Idea and other telecom operators have to pay the government a whopping Rs 1.4 lakh crore following the Supreme Court order that has sent shock waves through an industry already grappling with past losses and billions of dollars in debt.

According to latest estimates by the telecom department, Bharti Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore. The remaining liability is with state-owned BSNL and MTNL and some of the shut or bankrupt telecom companies. Stung by colossal losses, Vodafone Idea has said its ability to continue as a going concern is dependent on obtaining relief from the government and positive outcome of the proposed legal remedy. The company is also in the process of filing a review petition against the Supreme Court order.

The Department of Telecommunications (DoT) had shot off notices to telecom operators to pay their revenue share dues within three months as directed by the Supreme Court. The DoT has given the option to telecom operators to clear all the dues on a self-assessment basis. Last month, the government also constituted a committee of secretaries to explore a financial bailout package for the telecom sector.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)



What happens to your outstanding loans if the bank falls?

... ...

Time for a change! Innovations to stop the growing plastic pollution

As the planet is drowning in plastic pollution, many new innovative approaches and solutions have emerged to effectively deal with the menace....

How to avoid fake universities and fishing bait like Farmington

As education sharks are roaming around to prey, we present a guide on how to mitigate hunters and reach to a genuine universityinstitute. In this era of commercialization of education, the fake universities and economic frauds in educationa...

How India is being pushed towards commercialization of higher education

The reluctance of the present dispensation in pushing the higher education towards commercialization is not just limited to the fees hike in Jawaharlal Nehru University JNU. It seems the government is gradually implementing a plan which is ...


Latest News

UPDATE 1-Merkel to give Auschwitz 60 million euros from Germany during first visit

Angela Merkel will make her first visit to the Auschwitz-Birkenau Memorial on Friday after 14 years as German chancellor, bringing a 60 million euro donation to help conserve the site where the Nazis ran their largest death camp, the museum...

UPDATE 6-U.S. cracks down on Russian 'Evil Corp' hackers after $100 mln spree

U.S. authorities on Thursday took aim at a Russian cybercriminal group known as Evil Corp, indicting its Lamborghini-driving alleged leader and ordering asset freezes against 17 of his associates over a digital crime spree that has netted m...

TIMELINE-Saudi Aramco's winding road to an IPO

State-run oil giant Saudi Aramco has priced its initial public offering IPO at the top of its indicative range, making it the worlds biggest flotation by raising more than Alibabas 25 billion listing in 2014. Here are key events in the Saud...

UPDATE 1-At Iowa event, Biden gets into spat over Ukraine

On a day when Democratic presidential candidate Joe Biden sought to fortify his foreign policy credentials in his quest to take on Donald Trump next year, he mixed it up with an Iowa voter over his sons alleged role in the Ukraine scandal t...

Give Feedback