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Mittal reiterates Airtel has paid all its AGR dues PDF Print E-mail
Thursday, 12 March 2020 09:12
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Bharti Airtel chairman Sunil Mittal on Wednesday met telecom secretary Anshu Prakash in connection with the telco’s AGR dues and reiterated that the company had fully paid its dues. Speaking to the media later, he said Airtel had made all the AGR payments and also submitted the supporting documents. Asked if the balance AGR dues – as per the DoT calculations – would be paid by Airtel, he said all payment had been made and that even the DoT order said telcos had to pay their dues as per self-assessment.

While the DoT had said Bharti Airtel owed Rs 35,586 crore in AGR dues, the telco has assessed its dues at Rs 13,004 crore; it has, however, paid the DoT an extra Rs 5,000 crore on top of this to account for any other contingencies and possible errors in its calculations or DoT disallowing some of the expenses it has claimed. Vodafone Idea was said to owe Rs 53,039 crore while its own assessment puts the number at a lower Rs 21,533 crore. In the case of Tata Teleservices, while the DoT estimated its dues at Rs 13,823 crore, the company put it at Rs 4,197 crore. While Tata Teleservices has paid this amount, Vodafone Idea has paid just Rs 3,500 crore so far, and has made it clear it cannot pay the balance unless there is a rescue package from the government; this is expected to be taken up within the next week to 10 days.

“We have paid the full dues… We have been asked to pay on self assessed basis and we have paid the full amount. DoT has not asked us to pay this (amount). They have sent a letter to pay as per self-assessment… the payment is in compliance with the DoT order,” Mittal said on being asked if the company will pay more amount as sought by the DoT. “We have given the supporting documents regarding self-assessment,” Mittal said after meeting the telecom secretary.After the telcos had paid their self-assessed dues that are much lower than the DoT’s assessment, the DoT had asked telcos to deposit the difference or to provide all supporting documents on the difference. “There is no us versus DoT,” Mittal said in response to a query on this. “They asked us to self assess, we have self assessed and paid.” This is critical since, if the amount self-assessed is even Rs 500-1,000 crore less than what the DoT says it is, this can make the AGR dues fall by Rs 4,000-5,000 crore since the bulk of the AGR dues comprise interest and penalty on the basic AGR amount due.

Commenting on this, a Kotak Institutional Equities note had said “the wide gap between self-assessments and DoT’s assessment raises a few questions… why did Bharti and Vodafone Idea make much higher provisions in their 2QFY20 earnings?” According to Kotak, “We believe the companies did not have enough time post the Supreme Court’s October 24, 2019 order to complete their self-assessments and adopted a conservative stance. They extrapolated the DOT’s then-latest demand and made conservative provisions.”

It added, “We understand that allowable set offs against revenues were disallowed by DOT often due to absence of documentation or even absence of documentation in a particular format…The biggest of such disallowed items includes interconnect charges – these have been allowed as a deduction in the AGR by all authorities including the Supreme Court. Proper documentation of interconnect payouts has allowed operators to now calculate the correct AGR.”

Kotak added, “We understand that DOT requires licence fee to be paid on cash basis versus accounting on an accrual basis that operators follow… This has also caused differences in amounts and timing of payout of such amounts.”

While the next step will depend on what the Supreme Court has to say at the next hearing, the DoT has already made it clear that there will be an independent audit of the self-assessments by the telcos.

 
 

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