Bad news for India’s telcos, as consumer group files litigation to reclaim AGR dues

Collectively, Indian telcos owe the Department of Telecoms around $13 billion in unpaid dues, related to a recent Supreme Court ruling
India, Telecoms, AGR, Vodafone Idea, Bharti Airtel, Reliance Jio

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An Indian consumer rights group has launched a public interest litigation (PIL) against the Department of Telecoms in the Supreme Court, accusing it of not pressing telcos hard enough over billions of dollars of unpaid dues.

A recent ruling by India’s Supreme Court stipulated that telcos must adjust the way they calculate their adjusted gross revenues, to include non-core services such as the sale of smartphone handsets. The ruling created nearly $13 billion of debt to be paid by India’s ailing telcos to the Department of Telecoms.

Both Vodafone Idea and Bharti Airtel missed Friday’s deadline to make payment of the outstanding dues and have filed appeals against the ruling.   

On Saturday, the Save Consumer Rights Foundation filed a PIL against the Department of Telecoms for failing to make sufficient efforts to reclaim the outstanding dues, claiming that telcos must not be allowed to “wriggle” out of their responsibilities.

“The present writ petition challenges the impugned direction ...whereby, the Department of Telecommunication (DoT) has directed its Controller of Communication Accounts (CCAs) of the respective Licence Service Areas (LSAs)... not to take any coercive action against the TSPs/Licensees in case they fail to comply with the order dated 24th October 2019 passed by this... Court,” said the petition, originally quoted in the Economic Times of India.

Reliance Jio was the only telco to meet the DoTs Friday deadline, paying off its dues in full. Jio owed substantially less than Vodafone Idea or Bharti Airtel.

“[The] amount of over Rs 1,47,000 crores is not a small sum whose recovery can be postponed or delayed despite specific directions of this Hon’ble Court at peril of detriment of the citizens of this country from whom these TSPs (telecom service providers) have already collected huge amounts and earned revenue,” the PIL documents read.

“It is humbly submitted that these dues which have been adjudicated in favour of the government by the Hon’ble Court are not simpliciter private contractual dues of the central government but, in essence, public money and thereby involves substantial public interest. The TSPs after having collected huge amounts from the consumers cannot be allowed to wriggle [out] of its obligation to pay the dues as per the Licence Agreements,” the document stated.

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