May 23, 2017

Rs 400 cr loss to exchequer in licence fee payment by incumbent telecom players: Jio

BYPankaj Mishra

The payment of advance licence fee for the last quarter (January-March) of 2016-17 by three telecom service providers — Bharti Airtel, Vodafone India and Idea Cellular — has resulted in a loss of Rs 400 crore to the government, Reliance Jio has claimed.
These companies paid advance licence fee for the last quarter on the basis of estimated adjusted gross revenue (AGR), which is less than the stipulated amount — that is based on the AGR of third quarter, it said.
“The said act of the incumbent TSPs (telecom service providers) has caused potential financial loss amounting to over Rs 400 crore to the government exchequer and in any event has caused a revenue shortfall of the said amount in FY 2016-17,” Reliance Jio said in a letter to the Department of Telecommunication (DoT).
A copy of the letter is available with IANS.
Jio said DoT should take appropriate action against the violating TSPs, which includes financial penalties and even revocation or termination of licences for a clear and apparent breach of licence conditions.
Jio said it has learnt that Cellular Operators’ Association of India in a letter to the DoT had proposed that its member TSPs should be allowed to pay licence fee for Q4 of 2016-17 on the basis of estimated AGR of Q4, rather than the licence condition of paying the estimated AGR of Q4 or the actual amount paid in the preceding Q3, whichever is higher.
By proposing to pay an amount lower than the actual amount paid in Q3, the TSPs have violated the licence conditions, the letter contended.
“The terms of the licence, as it stands today, does not allow the Licensees to unilaterally decide to and remit lesser licence fees, and any such act is a material breach of the licence terms,” the letter stated.
Jio stated that the said violation of the incumbent TSPs constitutes a willful and material breach, warranting stringent and punitive action, as envisaged in the licence terms, which range from financial penalty (up to Rs 50 crore per circle) to termination/revocation of licence.

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Pankaj Mishra is a writer of FactorDaily.