AGR case: Telcos' plea rejection does not bode well for sector recovery, says Icra


PTI | New Delhi | Updated: 23-07-2021 14:54 IST | Created: 23-07-2021 14:54 IST
AGR case: Telcos' plea rejection does not bode well for sector recovery, says Icra
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The rejection of telcos' pleas seeking re-calculation of AGR related dues does not bode well for a recovery in the sector and is likely to protract the same given the backdrop of high debt levels and low tariffs, Icra said on Friday.

The Supreme Court has dismissed the applications filed by telecom majors, including Vodafone Idea and Bharti Airtel, seeking rectification of the alleged errors in the calculation of adjusted gross revenue (AGR) related dues payable by them.

Icra said to meet high commitment towards debt repayments and the DoT payment obligations, the industry participants will need to explore avenues of fundraising or asset monetisation, besides concentrating on improving the ARPU levels, substantially.

Noting that Supreme Court has dismissed the applications of telcos for recomputation of AGR dues, Sabyasachi Majumdar, Senior Vice President and Group Head of Icra Limited said, ''This will not bode well for the recovery in the sector and is likely to protract the same, given the elevated debt levels and very low tariffs''. The industry is staring at high commitments towards debt repayments and the DoT (Department of Telecom) payments in the coming few quarters, with the next major payments due in March-April 2022. ''In order to meet these, the industry participants will have to look for avenues of fundraising and/or asset monetisation, in addition, to focus on substantially improving the ARPU levels,'' Majumdar said.

The telecom companies had submitted before the apex court that arithmetical errors in the calculation be rectified and had flagged the issue of duplication of entries.

All the miscellaneous applications are dismissed, a bench headed by Justice L Nageswara Rao said on Friday while pronouncing the order. Market watchers said the rejection of the appeal is a major setback, especially for cash-strapped Vodafone Idea.

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

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