AGR Update: SC suggests government to cancel licenses if dues are not paid

The Supreme Court has said that the government should cancel licenses and spectrum if statutory dues are not being paid.

If the government indeed does go ahead with this, it will pose a difficult situation for Reliance Communications (RCOM) and Aircel, who are in talks to sell their respective assets (including airwaves) to a third party but have pending adjusted gross revenue (AGR) dues.

Cancelling spectrum licenses of the two telcos’ would jeopardise their resolution plans.

RCOM and Aircel owe Rs 251.99 billion and Rs 123.89 billion, respectively, in AGR dues to the government.

Earlier, the SC had enquired about the spectrum sharing and trading details between bankrupt telcos and Airtel and Jio to make sure that the AGR dues are not evaded by either party.

In reference to this, DoT has filed an affidavit informing the SC that the AGR payments made by telcos cannot be considered full and final and that the government will await the court order to calculate final AGR liability on the traded/shared spectrum.