Stay or go? Hughes India is not leaving yet

Stay or go? Hughes India is not leaving yet

Adjusting a recent strong statement from a senior executive implying that AGR dues could bankrupt it, US satellite communications provider Hughes Network Systems has said it has no plans to shut its Indian arm, Hughes Communications India.

The company’s aim, according to another senior official quoted in the Indian business press, is to clear its adjusted gross revenue (AGR) dues to prevent any disruption or job losses.

The company has some 200 employees. More importantly perhaps, its satcom services and satellite broadband connectivity are used by banking & finance, education, oil & gas, FMCG and defence, to name only a few important sectors.

Hughes’ AGR dues have been estimated by the Department of Telecommunications (DoT) at around $84 million. A recent letter from the company to the DoT claimed the company would go bankrupt and shut down if it had to pay this amount. Indian press reports suggest, however, that Hughes self-assessments of its dues are much lower and that it hopes to be granted some concessions from the DoT.

In the fuss about the, admittedly vast, amount being demanded from Bharti Airtel and Vodafone, it seems to have been forgotten that other companies have big debts to pay: 15 telecom companies, including Hughes, face significant AGR dues after an October 2019 Supreme Court ruling.

A modification request, asking for permission to negotiate with the DoT over time to pay, was presented to the court earlier this year. However all companies need to have paid some or all of their dues by the time of the next hearing on 17 March, which begs the question of how or whether the sums can still be reduced.

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