Reliance Jio Infocomm Ltd is likely to tell the Supreme Court that it is not liable to pay the adjusted gross revenue (AGR) related dues of Reliance Communications Ltd (RCom) despite using its spectrum, two people aware of the matter said, since most of these dues predate Jio’s use of RCom’s spectrum.
On Friday, the Supreme Court added a new dimension to the AGR case by asking whether Jio should pay the dues of bankrupt RCom. Mukesh Ambani-controlled Jio has been using RCom’s 800 megahertz spectrum under an asset-sharing agreement since 2016 when Jio launched its operations.
However, the AGR dues in question, as calculated by the department of telecommunications (DoT), relate to 2G and 3G business of RCom and Reliance Telecom Ltd (RTL) carried out before 2016, the people cited above said on condition of anonymity. A note in the apex court’s 20 July order says, “Total demands have been calculated generally up to FY17".
RCom owes ₹25,199.27 crore in AGR dues, including spectrum usage charge (SUC) and licence fees. Jio, on the other hand, has already cleared its relatively small AGR dues of ₹195.18 crore in January, complying with the apex court’s October 2019 order.
“The AGR dues of RCom and RTL are in no manner connected with this shared spectrum. The spectrum sharing is fully compliant with DoT rules," one of the two people said.
K.V. Vishwanathan, counsel for Jio, told the Supreme Court on Friday that the company is paying SUC to the government. “Both Jio and RCom continue to discharge in full its AGR, SUC and licence fee liability in respect of revenue from the shared spectrum. Further, both parties continue to pay additional SUC to the government towards the spectrum sharing arrangement," the second person added.
An email sent to Reliance Jio remained unanswered.
The three-judge bench, headed by Justice Arun Mishra, also asked all three bankrupt telcos—RCom, Aircel Group and Videocon Telecommunications Ltd—to furnish details of those using their airwaves at Monday’s hearing.
Analysts at brokerage Axis Capital said developments in the AGR matter may not impact Jio or rival Airtel. “Airtel and Jio are unlikely to be impacted as most (AGR) dues of Aircel, Videocon and RCom are prior to the spectrum sale...ownership and rights of spectrum in case of spectrum sharing are not transferred, and Jio has been paying SUC for shared spectrum in keeping with the rules," Axis Capital said in its report.
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