India’s third largest telco by subscribers, Bharti Airtel, has made an initial payment of $1.4 billion (INR10,000 crore) to the Department of Telecoms towards its outstanding AGR dues.
The company said that it was currently undertaking a self-assessment exercise to determine the total amount it still owed the DoT.
“We are in the process of completing the self-assessment exercise expeditiously and will duly make the balance payment upon completion of the same, before the next date of hearing in the SC,” India’s Financial Express quoted Bharti Airtel as saying.
Airtel has said that it will endeavour to make payment of the outstanding balance before the 17th March 2020.
Late last year, the Department of Telecoms ruled that Indian telcos must include a much broader range of products and services when calculating their adjusted growth revenues (AGR). As the DoT uses a company’s AGR to calculate dues on spectrum usage fees, the ruling subsequently saddled Indian telcos with nearly $13 billion of debt – the brunt of which will be borne by Vodafone Idea and Bharti Airtel.
The Department of Telecoms had originally given a deadline of the 23rd of January for the payment of outstanding dues – a date that both Bharti Airtel and Vodafone Idea flatly ignored. The Supreme Court intervened last week to reprimand the DoT for placing the recovery of dues on hold.
India remains one of the world’s most competitive markets, with operators struggling to balance the gargantuan capital investment demands of 5G preparation with wafer thin profit margins.
The Supreme Court ruling dealt India’s telcos a significant financial blow during a period when they can least afford it. Vodafone Idea has publically stated that it will require government assistance if it is to continue as a going concern, as it struggles to meet its AGR obligations.