Supreme Court Denies Telecom Giants' Requests for AGR Dues Relief

Supreme Court's Firm Stance on AGR Dues

New Delhi: On Monday, the Supreme Court dismissed appeals from major telecom companies, including Bharti Airtel, Vodafone Idea (Vi), and Tata Teleservices, which sought relief from interest and penalties related to their adjusted gross revenue (AGR) obligations, labeling the requests as 'misconceived.'

This decision follows the government's earlier rejection of Vodafone Idea's request for additional support concerning its AGR dues. According to sources, the Department of Telecommunications (DoT) stated in a letter dated April 29 that further concessions on AGR liabilities could not be entertained due to the Supreme Court's ruling from 2020, which mandated a ten-year period for telecom operators to settle their dues.

Vodafone Idea had aimed to secure a waiver exceeding Rs 45,000 crore in AGR-related obligations to ensure its ongoing operations.

In a similar vein, Bharti Airtel and its subsidiary Bharti Hexacom sought a waiver of Rs 34,745 crore concerning interest and penalties.

The DoT highlighted that Vodafone Idea had previously received partial assistance when the government converted Rs 36,950 crore of spectrum-related dues into equity, thereby increasing its ownership stake in the company to 49%.

Previously, the government had requested an extension of the repayment period to 20 years, but this appeal was also rejected.

Vodafone Idea has been embroiled in a protracted legal battle regarding the definition and calculation of AGR since a Supreme Court ruling in 2019. The telecom firms contested the calculations, citing mathematical inaccuracies, but the Supreme Court dismissed these claims. A curative petition filed by Vodafone Idea in July 2024 was also rejected in September 2024.

As a joint venture between the UK-based Vodafone Group Plc and India's Aditya Birla Group, Vodafone Idea has faced significant financial challenges since the 2019 Supreme Court decision expanded the definition of adjusted gross revenue, leading to a substantial increase in liabilities for telecom companies.

Despite the government's conversion of part of the company's dues into equity, resulting in a 49% stake acquisition, Vodafone Idea continues to grapple with severe financial difficulties due to its overwhelming debt.

On a positive note, Vodafone Idea launched its high-speed 5G services in the Delhi NCR region on May 15, following similar expansions in Mumbai, Chandigarh, and Patna as part of its initial rollout phase.

The company has announced plans to introduce 5G services across all 17 priority circles where it has secured 5G spectrum by August of this year.