DoT errors have led to manifold increase in AGR dues: Vi plea in Supreme Court

MUMBAI: Vodafone Idea (Vi) has alleged that “clerical arithmetical errors” by the telecom department in calculating adjusted gross revenue (AGR) has led to a manifold increase in the adjusted gross revenue (AGR) dues being sought from the telco. Vi has appealed to the Supreme Court to modify or clarify its earlier order, so as to allow the government to consider the telco’s submissions on these calculation errors and rectify them accordingly.

“The present application is being filed inter alia, seeking clarification/ modification of the judgment of this court dated 01/09/ 2020….. and other connected matters to a limited extent of allowing to carry out corrections relating to manifest/clerical/ arithmetic errors, etc. In the computation of applicant’s adjusted gross revenue,” Vodafone Idea said its petition that ET has seen.

In its petition which lists the government as the respondent, the telco highlighted various errors that included the department not accounting Vi’s earlier payments, double counting of revenue items, deductions not given on access and roaming charges made by Vi to the other telcos.

“The excess demand upon the applicant which is attributable to these errors amounts to Rs 5,932 crore of principal amount, which would have an overall impact of over four times on the total principal amount aforementioned due to imposition of interest, penalty and interest on penalty,” the telco added.

The plea comes after the top court held the Department of Telecommunications’ (DoT) calculated dues as the final amount that telcos need to pay. This left Vi facing Rs 58,400 crore in AGR dues, of which it has paid Rs 7,854 crore. It needs to pay the balance in 10 annual instalments ending March 31, 2031. Vi itself had estimated its dues to be at Rs 21,533 crore, calculations that the apex court had rejected.

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Vi follows Bharti Airtel in approaching the Supreme Court, highlighting errors in AGR calculations. Airtel too sought modification, clarification or recall of “mistaken orders” that allowed the government to demand Rs 43,980 crore as AGR dues against the telco’s calculation of Rs 13,004 crore.

Airtel, in fact, has said that the DoT’s errors have resulted in a significant increase in the due amounts being claimed. “…as for every Re. 1 increase in the principal amount, the levy of interest, penalty and interest on penalty, results in the amount being claimed by the respondent increasing by up to Rs. 8/-, depending on the year to which it pertains”.

Tata Teleservices, which has AGR dues of Rs 16,798 crore and has paid Rs 4,197 crore so far, may also move the apex court on similar grounds, said people familiar with the matter. Tata Tele did not offer any comment.

This is not the first time though that the telcos impacted hugely by AGR dues have highlighted their grievances to both SC and DoT. While its earlier appeals were thwarted by the court, their last batch of letters to DoT on this issue have not elicited any response.

“The applicant has repeatedly brought to the knowledge of the respondent several manifest/clerical/arithmetic errors and omissions and has submitted proofs in support thereof…Despite applicant’s requests, the corrections for these errors and mistakes have not been effected by the respondent, thereby causing prejudice to the applicant,” Vi said.

Any reduction in AGR dues is crucial for Vi, given its weak cash flows, huge debt and need to invest in expanding its 4G network to stem rapid subscriber losses, analysts said. The company is looking to raise Rs 25,000 crore through debt and equity to tide over its financial crisis.

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