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Hughes India may shut shop over Rs 600cr AGR dues; move to hit banks & defence services

President Partho Banerjee in a letter dated February 20 stated: “We are facing a huge demand...which by no means is serviceable by us and is in fact pushing our company towards bankruptcy and closure.”

February 25, 2020 / 02:28 PM IST
Representative Image (REUTERS/Danish Siddiqui)

Representative Image (REUTERS/Danish Siddiqui)

Hughes Network Systems, which powers multiple banks’ and defence communication systems in India, may shut its local unit over its Rs 600 crore ($84 million) unpaid aggregate gross revenue (AGR) dues, Reuters reported.

Its President Partho Banerjee in a letter dated February 20 stated: “We are facing a huge demand...which by no means is serviceable by us and is in fact pushing our company towards bankruptcy and closure.”

He added the letter is an 'SOS request' and that Hughes India’s closure would negatively impact connectivity of over 70,000 banking locations and 'critical satellite networks' in the Indian navy, army and railways, the report said.

The company claims the department of telecommunications (DoT) had “made an incorrect calculation of the dues more than a decade ago which has ballooned to $84 million with interest and penalties.”

Hughes India told Reuters its remains committed to India while refusing to discuss the letter; while the Telecom Ministry did not respond to the agency’s queries.

Close

India’s telecom sector set-off in a tailspin when in October 2019 the Supreme Court ordered all telecom companies to pay up on their pending AGR dues and penalties. While telcos are the hardest hit, with Vodafone Idea (owes $3.9 billion) also raising alarm over potential exit from India, Hughes' $84 million bill is three times its net worth in India, the report added.

Hughes Network Systems is a part of US-based satellite and internet provider group Echostar Corporation. In the banking sector it provides communication services to over 30 public and private entities.
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