Reliance Jio may have to pay RCom's debt, the central government may take a big decision

 Reliance Jio, the country's largest telecom operator, may also have to pay AGR dues and feels it will not get relief. The apex court has asked the government whether the GO should pay the AGR arrears accordingly.

 During the last hearing in the AGR (Adjusted Gross Revenue) case, the Supreme Court asked why Reliance Jio should not pay the outstanding AGR for the spectrum acquired by Reliance Communications when it has been using it for three years. Significantly, under an agreement, Reliance Jio is using the spectrum of Anil Ambani Group company Reliance Communications (RCom).

 A three-judge bench headed by Justice Arun Mishra asked the government, i.e. the Department of Telecommunications (DOT), to clarify its position on the matter as to whether Geo should be paid for the spectrum taken from RCom. In 2016, Geo decided through a deal that it would use 17 circles of RCom spectrum for its 4G services.

 Adjusted Gross Revenue (AGR) is the consumption and licensing fees charged by telecom companies through the Department of Telecommunications (DOT) of the Ministry of Communications. It has two parts - spectrum usage charges and licensing fees, which are 3-5% and 8%, respectively.

 The Department of Telecommunications says AGR should be calculated on the basis of a telecom company's total revenue or income, including revenue from non-telecom sources such as deposit interest and asset sales. Telecom companies, on the other hand, said that AGR should be calculated on the basis of revenue from telecom services.

 But in October last year, the apex court in its judgment against telecom companies said that according to the telecom department, they would have to pay the AGR arrears. The arrears of all telecom companies are around Rs 1.5 lakh crore.

 It also includes RCom's outstanding money. According to the Department of Telecommunications, RCom owes about Rs 25,194 crore. The court has sought an up-to-date data from the department on the outstanding amount, as interest on it is rising. The court believes that now that Geo is using RCom's resources i.e. spectrum, it should pay the outstanding amount of AGR.

 However the government is also running the matter safely and has said it will accept whatever the court decides. Xiao, on the other hand, says it is already paying SUC charges for the use of spectrum as per the rules.

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