New Delhi: Public sector oil explorer Oil India Ltd (OIL) may move Telecom Disputes Settlement and Appellate Tribunal (TDSAT) challenging any move by Department of Telecommunications (DoT) to seek additional licence for their limited telecom and internet service operations on the basis of a recent Supreme Court ruling on adjusted gross revenue (AGR).
Other PSUs including PowerGrid, Railtel, GAIL, DMRC and Gujarat Narmada Valley Fertilizers & Chemicals Ltd are also evaluating the option and would finalise their move soon about getting clarity from the tribunal on expected licence fee demand from DoT based on their overall revenue and not limited telecom operations that they run.
DoT is learnt to have calculated licence fee dues to the tune of Rs 48,489 from OIL which the company is likely to challenge in TDSAT later this week, sources in OIL said. As per licence conditions, any dispute between the licensor and the operator has to be referred to TDSAT.
“We are not looking at any action on the AGR issue as no notice has been received by us so far demanding additional payment towards licence fee. Legal action may be contemplated once something moves on that front,” said an official of a public sector energy company asking not to be named.
The Supreme Court on Friday rapped telcos including Airtel and Vodafone to comply immediately with its earlier order to pay AGR dues and also asked managing directors and directors of all telecom operators to be present in court on March 17, in case the dues have not been paid by then.
Though non-telecom companies have not been directly impacted by the latest order from the apex court that was considering petitions of only telcos, there is fear that DoT may use the issue to target non-telecom companies as well to keep it at safe distance from any future wrath of the courts.
As per industry sources, if AGR is calculated as per new DoT definition, PowerGrid would require to fork out over Rs 22,063 crore. The impact would be much higher for GAIL and other non-telecom PSUs. Total dues from these non-telecom companies could work out to over Rs 2 lakh crore. GAIL alone could be in the region of 1, 72,500 crore.
On October 24 Supreme Court ruled that AGR for telcos should include all revenue accrued to carriers, including that from non-core activities, backing the telecom department’s stance in a 16-year-old case but putting additional licence fee burden of Rs 92,000 crore on telecom companies.
While the order did not distinguish between pure play telecom players and those with very limited telecom operations for payment of licence fee under the new AGR definition, there is fear and doubt among cross section of energy and infrastructure sector PSUs that they may also be asked to pay higher licence fee for their telecom operations by way of Internet Service Provider (ISP) and National Long Distance Service licences.
“The broad understanding is that we are not a telecom company and certain licences (ISP or NLD) are peripheral to our core business activity. So, revenue from our other operations should not form part of AGR calculation for determining telecom service licence fee,” said an executive of another energy sector PSU asking not to be named.
Another official from Power Grid Corporation (PGCIL) said that the company has paid licence fee of Rs 59 crore (8 per cent of revenue) to DoT for ISP and NLD services as per the terms of the contract on telecom revenue of Rs 742 crore. Powergrid’s telecom revenue is just 2 per cent of its total revenue with almost 95 of the revenue flowing from power transmission operations.
“No further payment will be made to DoT and the company would fight it, if the issue is raised. A joint forum of non–telcom PSU companies may be formed later to take all possible remedial actions if there is any revision in their telecom licence fees,” said the official quoted earlier.
While DoT so far has not issued any directive to these PSUs on paying up licence fee dues on new AGR definition, it has sent letters to ISPs to submit the AGR documents up to 2018-19 in Kerala circle and plans soon start sending them across the country for compliance of the Supreme Court order.
DoT has already asked operators, including ISPs and Virtual Network Operators (VNOs), to do a self-assessment of their respective dues as per the licence conditions.
“Legal recourse may be taken if DoT insists on payment of licence fee dues even from non-telecom companies like us. However, being government companies, we hope that right view would be taken in our case,” said an executive of another public sector company.
PowerGrid with its brand name ‘POWERTEL’ in Telecom business has overhead optic fibre network that uses Optical Ground Wire on power transmission lines. The company has an all India Broad Band Telecom Network of 39,662 Kms. It is also a National Long Distance Operator (NLDO).
Gas transmission company GAIL has GAILTEL as its Telecom & Telemetry services arm providing communication services for its business critical pipeline Supervisory Control and Data Acquisition (SCADA) etc apart from commercially leasing telecom services to telecom operators across India. GAILTEL has laid OFC and telecom infrastructure along the NG and LPG pipeline. It has 12,000 Km of OFC network connecting more than 100 towns/cities across India.
Similarly , OIL also has national long distance service license (NLD) for monitoring its pipelines.
RailTel Corporation, a ‘Mini Ratna (Category-I) PSU,’ is one of the largest neutral telecom infrastructure providers in the country owning a pan-India optic fiber network on exclusive Right of Way (ROW) along Railway track. Similarly, Delhi Metro Rail Corporation (DMRC) is also registered as Infrastructure provider category-I (IP-1) license with DoT to establish and maintain the assets such as dark fibers, & tower for the purpose of grant on lease basis to the recognized and registered Telecom License for the telecom services.
