Telcos barring Reliance Jio to miss AGR deadline of Jan 24

Indian telecom companies – Vodafone Idea and Bharti Airtel – are set to miss the January 24 deadline of depositing the adjusted gross revenue (AGR) dues worth Rs 1.47 lakh crore.

Two highly placed sources from both the companies told DH that they have written a letter to Department of Telecommunication (DoT) stating that while they will comply with the Supreme Court order on paying adjusted gross revenue (AGR) dues, they will wait for paying it till the next week when their "modification" petition is heard in the apex court.

Vodafone Idea and Bharti Airtel face statutory dues of Rs 53,039 crore and Rs 35,586 crore, respectively, as per government disclosures to parliament. While Airtel has managed to raise the funds to suffice for the loss, analysts believe that this will become the existential threat for embattled Vodafone Idea. Many analysts are expecting a pre-2000 duopoly in the Indian markets due to this, with Airtel and Reliance Jio left in the race.

When contacted, both the companies declined to comment on the issue.

On the contrary, Mukesh Ambani-controlled Reliance Jio is expected to pay its entire dues of Rs 177 crore on Thursday and has provisioned for the liabilities in its latest financial results.
Jio was not a part of the review petition filed at the Supreme Court and it had a different stance on the matter. The review petition by the telecom companies seeks extension in the deadline to pay the dues.

Telcos, including the Vodafone Idea, Airtel, Jio, erstwhile Tata Telecommunication and now bankrupt Reliance Communications, owe a whopping sum of Rs 1.47 lakh crore to the DoT for the AGR – the usage and licensing fee that telecom operators are charged by the DoT.

Last week, the Franklin Templeton Mutual Fund – known for being conservative in approach – announced a 100% write-down on Vodafone Idea debentures after the Supreme Court rejected the review petition by telecom operators over the payment of AGR dues. This resulted in a four to seven per cent erosion in value for its six schemes exposed to Vodafone Idea debt. Other fund houses -- UTI Mutual Fund, Nippon Mutual Fund, and Birla Mutual Fund -- have written down the debentures on a valuation basis.

The 45 Mutual Fund schemes have a total exposure of Rs 3,389 crore to the telecom firm. Among them, Franklin holds papers worth over Rs 2,000 crore, Aditya Birla Mutual Fund and UTI Mutual Fund a little over Rs 500 crore each, and Nippon India of nearly Rs 200 crore.