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COAI pitches for 10-15 year payment schedule for telecom firms to pay past statutory dues

31 Jan 2020 Evaluate

The Cellular Operators' Association of India (COAI) has urged the government to offer a 10-15 year payment schedule for telecom companies to pay their past statutory dues, starting with part-payment upfront and a two-year moratorium. It noted that this formula of easier payment schedule to meet statutory obligations would offer the much-needed reprieve to telecom companies likes Bharti Airtel and Vodafone Idea, whose combined liabilities after the recent SC verdict run into billions of dollars. 

COAI has stated that the industry requires a debt package for payment of past statutory dues with a two-year moratorium, as in the case of payment made for spectrum bought in auctions. It said give telecom companies 10-15 years for payment of the full adjusted gross revenue (AGR) dues, a two-year moratorium and an interest rate at interbank borrowing rate levels that is at around 4-5 percent. It also said there could be an upfront payment of about 15 percent, which is equivalent of the principle AGR amounts. It added that the government will easily get Rs 15,000-20,000 crore only through upfront payments from large operators.

The industry body further said this will be a reasonable payment schedule for the crisis-ridden telecom industry, as it would allow them to invest money into network expansion and new technologies. It noted that fifteen telecom companies owe the government Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges. It added that these liabilities arose after the Supreme Court in October 2019 held that non-core revenues have to be considered for calculating statutory dues from adjusted gross revenue (AGR).

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