The Supreme Court on Thursday passed orders in favor of the government and asked the telecom operators to pay Rs 92,000 Cr to the government on the issue of Adjusted Gross Revenue (AGR).
Immediately after the verdict the shares of telecom players like Vodafone, Bharati Airtel and Idea plunged into 52 week low sharply. At the closing bell the shares of Vodafone traded at Rs.4.33 plunging into 23.4 percent. Meanwhile Bharati Airtel’s shares fell up to 10 percent but traded 3.3 percent higher at Rs 372.45.
However the entire telecom sector expressed their discontent with eth verdict in favor of the government and that it would mean a disastrous blow to the already troubled sector.
Central government and the telecom sector were at loggerheads with the definition of the Adjusted Gross Revenue (AGR). The telecom sector argued that the AGR included only license and spectrum fees. However, the TDSAT maintained that AGR includes rent, dividend and profits on eth sale of assets besides license and spectrum fees.
The Supreme Court bench comprising Justices Arun Mishra, AA Nazeer and MR Shah dispensed the ruling on Thursday afternoon. The bench ruled the sector to pay its dues to the government worth Rs. 92,000 Cr.
“We are extremely disappointed by the verdict of the Honorable Supreme Court. The ruling has come at a time when the sector as a whole is under severe financial stress. The latest verdict may further weaken the viability of the sector,” told Bharati Airtel in a statement following the apex Court ruling.
The telecom sector is already reeling under stress post the 2G spectrum verdict and moreover the entry of heavy weights like Jio only added to their woes.