Muhammad bin Tughlaq, the Sultan of Delhi from 1325 to 1351 AD, was notorious for taking extreme, dramatic decisions that put his subjects in misery. There were the excessive taxes to support his large army, which led to farmers switching occupation, and creating a food scarcity. Then, there was the declaration of copper currency to be on par with silver currency (to make up for silver shortage), which led to economic chaos and ultimately a big hole in the exchequer’s pocket. And the last straw: his decision to shift his capital from Delhi to Daulatabad, despite resistance from people. There was endless suffering from the journey and many died, and then he changed his mind again and decided to stick with Delhi. If there was Twitter then, #Tughlaq would have trended.
Well, the telecom regime in India resembles the sultan’s rule. With frequent changes in policy, and lack of clarity and good judgment, it has time and again inflicted pain on telcos and caused the death of a few companies. Sixteen companies in the race to provide telecom services in India at one time, are now down to three, excluding BSNL and MTNL.
The Damocles sword that is still hanging over the heads of Vodafone Idea and Bharti Airtel -— two older players — is the last pronouncement by the Supreme Court, on the contentious issue of adjusted gross revenue (AGR). The court slammed the Department of Telecom (DoT) for not enforcing its order on collection of dues, from the licence fee and spectrum-usage charges, and the telcos for not paying up.
With DoT and telcos disagreeing on what constitutes AGR, the dues have multiplied over 14 years, with the matter passed around the offices of Telecom Regulatory Authority of India (TRAI) and Telecom Disputes Settlement and Appellate Tribunal (TDSAT), and the apex court. The DoT wants the government to get a share of overall revenue, even when no money is paid by the customer, such as on discounts. Or for that matter, even on interest income on borrowed money till it is fully deployed as capex.
Finally, after nearly two decades of this stand-off, the bill — a staggering Rs.1.47 trillion — has now come to the telcos’ doors. It comprises 75% in penalty and interest on penalty, alone. As per