Telecom dues — Yet another deadline bites dust

NEW DELHI, JANUARY 27: Succumbing to pressure from private telecom operators, the Government is considering yet another shift in the deadl...

NEW DELHI, JANUARY 27: Succumbing to pressure from private telecom operators, the Government is considering yet another shift in the deadline for telecom companies in paying their licence fee dues. Companies were supposed to pay the entire licence fee dues, amounting to around Rs 3,200 crore, of the first three years by January 31, to be eligible to be shifted from the licence fee regime to a revenue-sharing regime.

A proposal to shift this deadline to March 15 has now been sent to Attorney-General Soli Sorabjee for his views. Since the deadline is only two working days away, there is pressure on the AG to give his comments at the earliest.

The A-G’s views have been sought because the migration of telecom companies from the licence fee system to the new revenue-sharing system has been challenged through a public interest litigation in the court.

According to official sources, the proposal to shift the January 31 deadline was mooted by the sub-group constituted by the Prime Minister to go into the “subsisting problems in the telecom sector”.

“We have merely sought the AG’s opinion on the legal tenability of shifting the key dates of the migration package cleared by the Cabinet especially since the matter is now being scrutinised by the Delhi High Court,” said a senior official of the Department of Telecommunications (DoT).

The Government, while clearing the migration package, had laid down rules that for being eligible to avail the benefits of migration from August 1, 1999, companies would have to comply with important milestones in clearing their previous dues. Private companies were required to cough up 35 per cent of their dues by July 31, last year, securitise their outstandings fully by November 30 and square up the entire dues by January 31.

Among the cellphone companies which owe the Government huge dues are Aircell with licences in Rajasthan, Haryana, Uttar Pradesh (east) with an outstanding of Rs 235 crore; Birla AT&T (Gujarat and Maharashtra) Rs 325 crore; Escotel (Haryana, Kerala and UP west) Rs 70 crore; Fascel (Gujarat) Rs 230 crore; Hexacom (North East and Rajasthan) Rs 50 crore; JT Mobile (Karnataka, Punjab, Andhra Pradesh) Rs 535 crore; Koshika (Bihar, Orissa, UP east and west) Rs 355 crore; Modicom (Karnataka, Punjab) Rs 250 crore; RPG (Madhya Pradesh) Rs 4 crore; Reliance (Assam, Bihar, Himachal Pradesh, North East, Orissa and West Bengal) Rs 86 crore; Tatas (Andhra Pradesh) Rs 94 crore; and BPL (Kerala, Maharashtra and Tamil Nadu) Rs 220 crore.

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Apart from this, basic phone companies also owe the Government another Rs 400 crore.

Sources point out that private companies have sought for a relaxation in the deadline because the migration package itself was under fire in the courts and this had created problems in banks forwarding funds to companies for this. “How an extension to March 15 will help these companies still defies our understanding because the situation with the banks is unlikely to change as the next date for hearing on the case has been fixed for March 21,” say officials in DoT.

Any delay beyond March 15 may not be possible because a commitment of Rs 2,000 crore has been made to the Finance Ministry for the current year’s Budget and will have to be in by the end of March.