These telecom firms couldn’t pay the excellent quantity, know what would be the impact on customers

by Jeremy Spirogis
India's cleanest city for 4th consecutive time

New Delhi: Following the Supreme Court's rebuke, the telecom firm of the central authorities gave 5 telecom firms, together with Airtel and Vodafone, until the midnight of February 14 i.e. Friday, however the firms failed to take action until the agreed time interval. Of this, solely Bharti Airtel stated that it’ll pay the quantity of Rs 10 thousand crore by 20 February and the remaining quantity can be paid later. The relaxation haven’t given any response on this regard. <! –


In such a state of affairs it’s doable that both the telecom firms declare themselves bankrupt or the Indian authorities refuses them to function the companies right here. In such a state of affairs, solely two telecom firms will stay in India. First Bharti Airtel and second Reliance Jio.

The final deadline was 23 January

In truth, a bench of Supreme Court Judge Arun Mishra had stated in its January 15 resolution that telecom firms ought to pay a complete quantity of Rs 1.47 lakh crore by January 23. The firms had filed a evaluate petition towards it within the Supreme Court but it surely was rejected.

Meanwhile, a desk officer of the Department of Telecommunications wrote a letter to the officers sitting on the respective constitutional post, stating that no quantity of any type needs to be paid until the subsequent order.

On this, Supreme Court Judge Arun Mishra expressed his displeasure. He stated how a desk officer can defy the order of the Supreme Court. At the identical time, he had requested the telecom firms why to not pursue a court docket violation case towards them.

The court docket expressed lots of resentment

Not solely this, the court docket informed the Solicitor General Tushar Mehta, showing on behalf of the Government of India, whether or not there was any factor referred to as regulation on this nation. On this, Tushar Mehta apologized and stated that the desk will take cognizance of the officer's work. Till then no motion must be taken.

Then the court docket had stated that the arrears must be recovered by midnight of 14 February. But this might not occur until the fastened time.

February 14 additionally fulfills its time period

The Central Government's Department of Telecommunications had given the next 5 telecom firms a deadline of 14 February to pay the AGR together with curiosity and dividends, however the firms didn’t repay it. The Department of Telecommunications had taken this step after the rebuke of the Supreme Court. Tell you ways a lot is owed to which firm. According to the report launched by CAG, Bharti Airtel owes Rs 21,682.13 crore to Vodafone Idea – Rs 19,823.71 crore to Reliance Communications – Rs 16,456.47 crore to BSNL – Rs 2,098.72 crore and MTNL – Rs 2,537.48 crore.

Know, what’s AGR

According to the principles, telecom firms should pay three % spectrum price of AGR and eight % license price to the federal government. The query is what’s AGR. According to the Telecom Tribunal 2015, the AGR can be included within the receipts excluding income from non-core sources equivalent to hire, revenue from sale of everlasting property, dividend and curiosity.

But the Department of Telecommunications additionally considers hire, revenue from sale of everlasting property and the quantity obtained from sale of junk in AGR. On this foundation, the excellent price is being demanded. But the telecom firms say that they shouldn’t be included within the AGR.

CAG report was revealed

There can also be a query as to why this motion is being taken. The Comptroller and Auditor General in certainly one of its stories had declared an impressive quantity of Rs 61,065.5 crore on telecom firms. In the identical petition filed by the Department of Telecommunications, the Department demanded curiosity on the overall excellent charges, fines and fines. This was opposed by the telecom firms. The court docket has allowed the central authorities to get better AGR from firms which is Rs 92,641 crore.

According to the report, solely 25 per cent of that is the precise arrears, the remaining quantity is on curiosity, penalty and high-quality. Companies demand that the quantity of curiosity and penalty on curiosity shouldn’t be recovered. But the Supreme Court or the federal government just isn’t prepared to simply accept this. Let me let you know that in the previous few years, the businesses misplaced within the competitors of low-cost name charges and free information. However, as a result of subsidy given by the Government of India, his companies continued. Meanwhile, the arrears continued to develop.

The idea of AGR was developed within the yr 1999 underneath the Telecom Policy. Under this coverage, firms should pay license price and utilization price of allotted spectrum as income share.

What would be the impact on peculiar customers?

Now the priority is concerning the affect of the shutdown of the telecom firms after not paying the excellent quantity. It is feared that solely two telecom firms will stay in India within the occasion of each the businesses declaring themselves bankrupt or the Government of India taking motion on them.

Bharti Airtel and Reliance Jio. Out of this, Airtel has been sharing cellular towers with Vodafone. In the occasion of its closure, Airtel should set up towers afresh. It will price, which can be compensated by rising information and name charges. Anyway, within the new yr each Airtel and Jio had elevated the information and name charges.

It is clear that now, when there isn’t a competitors, each firms will improve name charges together with information, which can immediately have an effect on the pocket of the widespread shopper.

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