SC ruling on telecom revenue a major blow: industry

Last Updated 24 October 2019, 17:19 IST

With the Supreme Court allowing the Department of Telecom plea to recover adjusted gross revenue of over Rs 92,000 crore from telecom firms, telecom industry on Thursday termed that the top court ruling is a disastrous blow to them.

“The Supreme Court’s judgement is the last straw in contributing to financial distress and it remains to be seen whether the industry will be able to recover from this setback. The immense financial pressure on the sector will also adversely impact Digital India rollout, “ Rajan S Mathews, Director General, Cellular Operators's Association of India (COAI) said here

The taxes and levies in the Indian telecom sector, ranging from 29% to 32%, are one of the highest globally. The sector has the lowest tariffs in the world backed by the investment of over Rs 10 lakh crore in setting up mobile networks over the last 20 years, he said, while reacting to the apex court ruling.

The industry, which is having Rs 4 lakh-crore debt, has been seeking the government help to end the financial crisis.

Though the government had raised a demand of Rs 92,641.61 crore from Bharti Airtel, Vodafone, Idea and many now-defunct telecom operators in licence fees based on revised revenue, the actual payout will be around Rs 1.4 lakh crore after including spectrum usage charge, penalty and interest, official sources said.

Over the next few days, the DoT will make fresh calculations since the Supreme Court allowed to impose penalty and collect fines, the sources added.

Expressing disappointment over the judgement, Bharti Airtel said, "The government must review the impact of this decision and find suitable ways to mitigate the financial burden on the already stressed industry.".

Vodafone Idea on the other hand exhorted the government to find ways to mitigate financial stress on the industry.

It said the judgment has "significantly damaging implications for India’s telecom industry" that is already reeling under huge financial stress and is left with only four operators.

The judgement also had ripples in share market as some telecom firms shares hit severely. Shares of Vodafone Idea plunged 23.4% to end at ₹4.33, while Bharti Airtel, which had slumped nearly 6% after the news, recovered and ended more than 3% higher at Rs 372.45.

(Published 24 October 2019, 17:16 IST)

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