Court rejects review plea from Indian operators

Court rejects review plea from Indian operators

India’s Supreme Court has rejected a plea to review a decision late last year that imposed massive penalties on the country’s three main operators.

Vodafone Idea, Bharti Airtel and Tata Teleservices had asked the court  to review its 24 October verdict, which expanded the definition of adjusted gross revenue (AGR), leaving all three to pay additional licence fees, spectrum usage charges, penalties and interest.

Vodafone Idea, asked to pay around $4 billion, and Bharti Airtel, with a $3 billion penalty, have been particularly hard hit. Reliance Jio, not involved in the review petition, has to pay the more modest sum of $1.8 million. At the moment the penalties are due to be paid by 23 January.

Last November, the three operators had sought a limited review of the ruling that they hoped might reduce the amount required. They did not challenge the entire Supreme Court order or ask for an extension of the payment deadline. Further petitioning is possible, though a positive result is not considered likely. There is also the possibility that the government may intervene, providing financial support or permitting a staggered payment scheme.

While the government has insisted that it does not want a monopoly-led market, the chances of all three private players continuing could be adversely affected if no solution can be found. There’s also the unwelcome spectre of job losses if Vodafone in particular decides the Indian market is no longer worth further investment.

Recent raised tariffs and a moratorium on spectrum payments have undoubtedly helped operators, but will they be enough to keep all three players in the market? With only a week to go until the payments are due, we may find out sooner rather than later.

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