Bharti Airtel had a spectrum agreement with Videocon
New Delhi:
The Supreme Court will hear tomorrow the plea of Bharti Airtel against the Centre’s demand to pay Videocon’s AGR (Adjusted Gross Revenue). The firm, which is India’s largest mobile carrier, has a spectrum agreement with Videocon, so the DoT wants Airtel to clear Videocon’s dues. Government’s Rs. 1376 crores.
Airtel had in March 2016 inked a deal worth Rs 4,428 crore to buy Videocon Telecommunications-owned spectrum in six circles – Bihar, Haryana, Madhya Pradesh, Uttar Pradesh (East), UP (West) and Gujarat.
Airtel, however, questioned the Centre’s demand for Videocon’s AGR, saying it cannot be attributed to the company’s past dues.
After this the Telecom Department went to court. In April this year, the government told the Supreme Court that it had raised the demand in compliance with the court’s earlier order, but received a negative response from Airtel.
During the hearing in September 2020, the apex court had said that as per spectrum trading guidelines, the AGR dues need to be cleared before trading of the license and if the seller could not make the payment, the buyer would have to step in.
Reports said that following Airtel’s move, the DoT took a legal view on encashing the company’s bank guarantees to raise Videocon’s dues.
At present, if a telco fails to pay its quarterly license or spectrum-related dues, the bank guarantee with the DoT is encashed. Bank guarantee is also filled from time to time.
Last year, the Supreme Court refused to restrain the government from taking coercive action against telcos for raising AGR dues. The court clarified that it will not hear pleas “even for a second” on revaluation or recalculation of dues related to AGR of telecom companies, which run up to around Rs 1.6 lakh crore.
In the subsequent hearing, the court also asked the DoT as to how it plans to recover AGR-related dues from companies facing insolvency proceedings and whether the spectrum given to these companies can be sold.
The DoT told the court that the spectrum is owned by the nation, is in the hands of the government and cannot be sold.
“The telecom does not own the spectrum, the contract only permits its use,” the department said. IBC (Insolvency and Bankruptcy Code) proceedings also cannot take place on spectrum.
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