Airtel 2015 Annual Report Download - page 162

Transformational Network
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160 Annual Report 2015-16
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Port charges
(i) Interconnect charges are based on the Interconnect
Usage Charges (IUC) agreements between the
operators although the IUC rates are governed by the
IUC guidelines issued by Telecom Regulatory Authority
of India (TRAI). BSNL has raised a demand requiring
the Company to pay the interconnect charges at the
rates contrary to the regulations issued by TRAI. The
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Telecom Disputes Settlement and Appellate Tribunal
(‘TDSAT’) which passed a status quo order, stating that
only the admitted amounts based on the regulations
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was also passed in our favour. BSNL has challenged the
same in Hon’ble Supreme Court. However, no stay has
been granted.
(ii) In another proceeding with respect to Distance Based
Carriage Charges, the Hon’ble TDSAT in its order dated
May 21, 2010, allowed BSNL appeal praying to recover
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the telecom operators, Hon’ble Supreme Court asked
the telecom operators to furnish details of distance-
based carriage charges owed by them to BSNL. Further,
in a subsequent hearing held on August 30, 2010
Hon’ble Supreme Court sought the quantum of amount
in dispute from all the operators as well as BSNL and
directed both BSNL and private telecom operators to
furnish Call Data Records (CDRs) to TRAI. The CDRs
have been furnished to TRAI.
(iii) In another issue with respect to Port Charges, in 2001,
TRAI had prescribed slab based rate of port charges
payable by private operators which were subsequently
reduced in the year 2007 by TRAI. On BSNL’s appeal,
TDSAT passed it’s judgement in favour of BSNL,
and held that the pre-2007 rates shall be applicable
prospectively from May 29, 2010. The rates were
further revised downwards by TRAI in 2012. On BSNL’s
appeal, TDSAT declined to stay the revised regulation.
Further, the Hon’ble Supreme Court vide its judgement
dated December 6, 2013, passed in another matter,
held that TRAI is empowered to issue regulations on
any matter under Section 11(1)(b) of TRAI Act and the
same cannot be challenged before TDSAT. Accordingly,
all matters raised before TDSAT, wherein TDSAT
had interfered in Appeal and passed judgements,
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such regulations.
The Company believes that the above said judgement
has further strengthened the position of the Company
on many issues with respect to regulations which had
been in its favour and impugned before TDSAT.
g) Department of Telecommunications (‘DoT’)
demands
i) DoT demands include demands raised for contentious
matters relating to computation of license fees and
spectrum charges.
ii) DoT demands include alleged short payment of license
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(AGR) between Company and DoT and interest thereon,
which the Company has obtained stay from appropriate
Hon’ble High Courts and TDSAT. TDSAT has pronounced
its judgement on April 23, 2015 thereby setting aside the
impugned demands raised by DoT and directed to rework
the license fees payable in light of the judgement and
to issue fresh demands. Pursuant thereto Union of India
(UOI) and the Company (on limited heads of revenue)
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cross appeals before the Hon’ble Supreme Court of India.
The Hon’ble Supreme Court of India issued notice in the
appeals and has declined to grant any interim relief to
UOI. The appeals tagged together came up for hearing
on February 29, 2016 and the Supreme Court allowed
DoT to raise demands as per its understanding with the
condition that the demands raised will not be enforced
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likely to be listed for hearing after 8 weeks. DoT further
had issued LF demand cum show cause notice for
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been challenged before TDSAT. TDSAT vide an interim
order dated August 17, 2015 had directed DoT not to
invoke any bank guarantees for realisation of impugned
demand amounting to ` 12,316 Mn and vide its order
dated November 6, 2015, TDSAT has disposed of the
matter after recording the statement made by UOI that
the demand notice should be construed as an advance
notice, which the DoT does not intend to enforce until
the appeals against Tribunal’s AGR judgement pending
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iii) DoT demands also include the contentious matters in
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including validity of certain documents allowed as Proof
of Address / Identity in certain mobility circles.
iv) DoT demands also include penalty for alleged failure to
meet the procedural requirement for submission of EMF
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The above stated matters are being contested by the
Company and the Company, based on legal advice, believes
that it has complied with all license related regulations as and
when prescribed and does not expect any loss relating to
these matters.
In addition to the amount disclosed in the table above, the
contingent liability on DoT matters includes the following:
v) Post the Hon’ble Supreme Court Judgement on October
11, 2011 on components of Adjusted Gross Revenue
for computation of license fee, based on the legal
advice, the Company believes that the realised and
unrealised foreign exchange gain should not be included
in Adjusted Gross Revenue (AGR) for computation
of license fee thereon. Accordingly, the license fee on
such foreign exchange gain has not been provided
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above. Further, as per the Order dated June 18, 2012
Hon’ble High Court of Kerala, stay has been obtained,
wherein the licensee can continue making the payment