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Telecom: Supreme Court rejects pleas on AGR recalculation
The Supreme Court has rejected a batch of curative petitions filed by telcos seeking to set aside the penalty and interest on penalty in the September 2019 order and seeking a correction in what they termed “arithmetical errors” in the telecom department's calculation of the adjusted gross revenue (AGR) dues.
We highlight that the DoT had back then estimated (Vodafone Idea) Vi's dues at ₹ 58,300 crore, but the telco had self-assessed the dues at ₹ 21,500 crore and has so far paid ₹ 7,900 crore. Thus, it was expecting a relief of over ₹ 35000 crore in its liability in case they get favourable judgement.
Given the no relief, we believe that Vi would now seek further extension of dues moratorium from the government, given their inability to meet the payment obligations. Thus, relief by government will be key ahead for its revival. Furthermore, if this uncertainty sustains, top two players remain a key beneficiary with acceleration of their market share gain
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