DoT Rejects Vodafone Idea licence fee reviews plea
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8 months ago 06:00:12am Television

DoT Rejects Vodafone Idea’s license fee review plea

New Delhi,09-October-2023, By IBW Team

DoT Rejects Vodafone Idea licence fee reviews plea

The Department of Telecommunications (DoT) has refused Vodafone Idea’s request for a review of license fee demands totaling ₹3,273 crore for fiscal years 2016 and 2017.

India’s third-largest carrier, Vodafone Idea, is now evaluating its options after filing a plea with the Supreme Court (SC) to rectify alleged “errors” in the DoT’s demands and reduce the outstanding amount.

In a filing to the Bombay Stock Exchange (BSE), the Aditya Birla Group-promoted company stated, “DoT vide its communication dated 4 October 2023 has disposed of the company’s representation and objections in respect of license fee demand of ₹1,749 crore and ₹1,524 crore, respectively (including Interest till 31 March 2023) for Financial Year(s) 2015-16 and 2016-17,” Mint reported.

Vodafone Idea, in which the government holds approximately 33% equity, had initially reached out to the DoT to rectify what it believed were errors in the demands related to fiscal years up to 2016-17.

However, no corrections were made by the department. Consequently, the telecom giant filed a review petition with the Supreme Court, seeking directions to address these alleged errors, which remains pending.

The issue centers around disagreements over the definition of Adjusted Gross Revenue (AGR) by the DoT, which includes the total revenue earned by telecom companies. The industry, on the other hand, argues that only telecom services revenue should be considered. In 2019, a Supreme Court judgment supported the government’s definition of AGR.

Both Vodafone Idea and Bharti Airtel had previously filed review petitions regarding this matter, but these were rejected. Subsequently, the telecom companies filed review petitions seeking corrections in the calculations for license fee dues.

Vodafone Idea stated, “If, however, it is permissible for DoT to modify the demands for the period covered by the judgment of the Hon’ble Supreme Court, then in that event there are various errors which need to be corrected and which would reduce the demand crystallized by the Hon’ble Supreme Court.”

With the review petition still pending, Vodafone Idea is now assessing its next course of action. The company faces a challenging environment with various issues, including the possibility of service restrictions by Indus Towers due to Vodafone Idea’s failure to meet contractual payments of more than ₹7,800 crore, including interest, as of September 2023.

Vodafone Idea did pay over ₹1,700 crore to the government as its annual installment for spectrum acquired in 2022, after availing a 30-day grace period. The company continues its efforts to secure debt and equity investors for a ₹20,000 crore funding plan that has been in progress since 2020.

This development highlights the ongoing challenges faced by Vodafone Idea in India’s competitive telecom market and its efforts to address regulatory and financial hurdles.


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