The Cellular Operators Association of India (COAI) has asked the government to completely remove the system of bank guarantees (BGs) for the telcos. Further, the industry body has asked for redefining the adjusted gross revenue (AGR) dues. Both have become issues for the industry, particularly Bharti Airtel and Vodafone Idea.
Through a tweet, SP Kochhar, Director General, COAI, said that the AGR definition should only include telecom revenues. In another tweet, Kocchar requested the government to dispense the requirement of bank guarantees immediately and also asked that all existing bank guarantees should be removed as well.
Bharti Airtel and Vodafone Idea to Benefit Most Out of COAI Requests
The request from COAI looks very timely for the operators. Bharti Airtel was recently threatened by the government to pay the AGR dues of Videocon. In case Airtel didn’t pay the dues, the government said it would have no other option left but to invoke bank guarantees. However, the Supreme Court asked the government not to go ahead with the move so that Airtel can take up the matter with Telecom Disputes Settlement and Appellate Tribunal (TDSAT). Further, last year, during the AGR dues case hearing, the telcos and the DoT were seen fighting on the definition of the AGR. The (Department of Telecommunications) DoT had included everything from telecom and non-telecom revenues when calculating AGR. But the telcos opposed this and said that dues should only be liable on the telecom revenues and thus wanted the definition of the AGR to be changed. Both the requests from COAI just portrays the delicate and desperate situation the telecom industry of India is in. There’s hardly any chance that these requests will be entertained by the government. The SC is also not very kind towards the operators when it comes to AGR dues. The apex court has denied the request of the telcos for the rectification of errors in the AGR dues.
