“The DoT (Department of Telecommunications) will now get down to recalculations and if the call is taken to withdraw appeal, then Airtel and Vi may have to pay about ₹2,000 crore each, or even less than that,” the official said, asking not to be named.
But the government will also have to take into account the current financial situation of loss-making Vodafone Idea and consider if the OTSC can also be brought under a moratorium currently covering the adjusted gross revenue (AGR) instalments and spectrum payments, the official added.
Cash-strapped Vi, under a debt of ₹1.9 lakh crore and with ₹920 crore cash balance at June end, received a lifeline recently when the government decided to offer a four-year moratorium on spectrum and adjusted gross revenue (AGR) dues, as part of a relief package.
DoT has pegged Airtel’s OTSC dues at ₹8,414 crore. Bharti Airtel recorded ₹1,807.5 crore charge towards OTSC in 2019-20, with the balance ₹6,606.5 crore as contingent liability. Vodafone Idea has said OTSC accrual till March-end 2021 was ₹4,389.8 crore, and it has provided for it in its financials.
If DoT decides to withdraw its appeal, it will be the latest move of the government to help a stressed telecom sector whose stake holders including banks have appealed for help. In 2019, OTSCs for the sector were about ₹25,000 crore but in its affidavit to the SC on Tuesday, DoT said the financial liability for telecom service providers would be to the tune of around ₹40,000 crore.
This includes interest and penalty on interest, against several telcos, of which only Bharti Airtel and Vodafone Idea are currently operational.
The government, in its latest relief package, though has sharply reduced the interest to be charged on outstanding dues and scrapped the penalty and interest on penalty components.
A Mumbai-based analyst said that the DoT will have to prepare how to recover even ₹2,000 crore from telcos. “Can the DoT include OTSC as part of its four-year spectrum moratorium offered to telcos, keeping Vi’s health in mind? If not, then will they expunge OTSCs altogether?”
These queries come on the back of the government informing the Supreme Court on Tuesday that it wants to reconsider continuing with its appeal against a decision taken by the Telecom Disputes Settlement Appellate Tribunal. The appellate court had in 2019 ruled that OTSC could be levied prospectively, not retrospectively, on telcos.
