AGR Case: Telcos’ plea rejection does not bode well for sector recovery, says Icra

The Supreme Court has dismissed the applications filed by telecom majors, including Vodafone Idea and Bharti Airtel, seeking rectification of the alleged errors in the calculation of adjusted gross revenue (AGR) related dues payable by them. 

Icra said to meet high commitment towards debt repayments and the DoT payment obligations, the industry participants will need to explore avenues of fundraising or asset monetisation, besides concentrating on improving the ARPU levels, substantially. 

Noting that Supreme Court has dismissed the applications of telcos for recomputation of AGR dues, Sabyasachi Majumdar, SVP and Group Head of Icra Ltd said, “This will not bode well for the recovery in the sector and is likely to protract the same, given the elevated debt levels and very low tariffs”. 

The industry is staring at high commitments towards debt repayments and the DoT payments in the coming few quarters, with the next major payments due in March-April 2022. 

The telecom firms had submitted before the apex court arithmetical errors in the calculation be rectified and had flagged the issue of duplication of entries. All the miscellaneous applications are dismissed, a bench headed by Justice L Nageswara Rao said on Friday while pronouncing the order.