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UPDATE 2-India's Supreme Court rejects telecom firms' plea for relief on govt dues

By Sankalp Phartiyal and Suchitra Mohanty

(Updates to add telecoms lobby group comment)

By Sankalp Phartiyal and Suchitra Mohanty

NEW DELHI, Jan 16 (Reuters) - India's top court has rejected petitions by mobile operators including Bharti Airtel and Vodafone Idea seeking a review of its order late last year that they must pay the bulk of nearly $13 billion in dues to the government.

The Supreme Court in October 2019 upheld a long-standing demand by the country's telecoms department that wireless carriers pay 920 billion rupees ($12.98 billion) in overdue levies and interest.

The court's rejection on Thursday of petitions seeking a review of that order, filed by Bharti, Vodafone Idea and the now-defunct Tata Teleservices, is likely to add to the financial woes of India's telecoms sector, which has been badly bruised by a price war.

It could also threaten the survival of Vodafone Idea, a combination of Britain's Vodafone Group Plc and local Idea Cellular.

Parent Vodafone Group has previously said the situation was "critical" after India's biggest carrier by users was saddled with about $3.9 billion in fresh payments due.

Bharti Airtel, which must pay roughly $3 billion under the ruling, has previously said the court order casts much doubt on "its ability to continue as a going concern".

On Thursday, Bharti said it was disappointed with the Supreme Court's decision and that it would evaluate filing another petition.

"The industry continues to face severe financial stress and the outcome could further erode the viability of the sector as a whole," Bharti said in a statement.

Vodafone Idea did not immediately respond to a request for comment.

The local telecoms industry lobby group said the sector was already taxed at what were among the highest rates globally.

"The Supreme Court's dismissal of the review petition is the last straw in contributing to financial distress and it remains to be seen whether the industry will be able to recover from this setback," the Cellular Operators Association of India said in a statement.

Shares in Bharti Airtel closed 1.3% higher while Vodafone Idea ended flat, broadly in line with a flat Mumbai market that edged up 0.1%. ($1 = 70.8795 Indian rupees) (Reporting by Sankalp Phartiyal and Suchitra Mohanty; Editing by Sanjeev Miglani, Alex Richardson, Kirsten Donovan)