TRAI’s Opinion To Be Sought On Relief Package To Telecom Companies After Supreme Court’s Order On AGR Payments

The committee of secretaries which is looking at a solution to reduce stress in telecom companies after the Supreme Court order on Adjusted Gross Revenues (AGR) may seek inputs from Telecom Regulatory Authority of India (TRAI) about any possible bailout.

The panel also plans to meet industry body Cellular Operators Association of India (COAI) as well as telecom companies like Reliance Jio, Bharti and Vodafone Idea, while seeking written inputs about the current situation as well as suggestions from the Department of Telecom (DoT) and TRAI.

Once the proposals are made, DoT will be asked to seek the opinion of the Law Ministry about the feasibility of aspects of the Supreme Court order. Discussions are on within the panel that TRAI should be consulted to discuss any relief to telecom companies.

The possible decision on any package to bail out the telecom sector will come before three months expire after the Supreme Court order which came on October 24.

The Prime Minister's Office (PMO) and the Union Finance Ministry have already held separate meetings with the DoT about working out a solution after the Supreme Court decision where telecom operators have been asked to pay Rs 1.3 lakh crore overall to the government as dues.

Adjusted Gross Revenues (AGR) includes all licensed revenues of a telecom firm not necessarily originating only from mobile or landline services. It now includes all incomes like towers, Internet Service Provider licenses and rentals as per the Supreme Court order.

So far, talks between the PMO and Union Finance Ministry have not come up with any possible way or solution to bring relief to telecom companies.

As the secretaries’ panel begins to meet more often, there is expected to be some direction which can be followed and only the PMO will take a call after inputs from the secretary panel, the Union Finance Ministry, the Union Law Ministry and the Department of Telecom.

However, the Union Telecom Ministry has made it clear to these ministries and the Prime Minister's Office (PMO) that insistence on payment by these telecom companies could land them in National Company Law Tribunals (NCLTs) where recovery of government dues would drag on again for years.

These telecom companies have taken huge loans of more than Rs 3-lakh crore from banks for previous spectrum auction which they would not be able to return to banks due to which non-performing assets would rise, the ministry held.