Vodafone Idea AGR relief applies only to the troubled telco: SC written order

The Supreme Court’s 27 October order permitting the Centre to address Vodafone Idea Ltd’s grievances and reassess its adjusted gross revenue (AGR) dues applies solely to the beleaguered telecom operator, clarifies the top court’s written order.

The written order, seen by Mint, makes it clear that the court’s observations apply only to the additional AGR demand raised by the department of telecommunications (DoT) for the period up to 2016-17, given the peculiar circumstances in which the Union government now owns 49% of the telco, which serves nearly 200 million consumers.

“We clarify that this is a matter falling within the policy domain of the Union of India and if, in the peculiar facts and circumstances of the case, the Union of India, keeping in view the larger public interest, desires to reconsider the issue, there is no reason to restrain or prevent it from doing so,” the bench of Chief Justice B.R. Gavai and justice K. Vinod Chandran noted in the written order.

“It is further to be noted that the prayer in the petition itself restricts its claim only to the additional AGR demand raised by the respondent for the period up to the Financial Year 2016-17. We further clarify that this order is passed only with regard to Vodafone Idea Ltd, taking into consideration the peculiar facts and circumstances of the case,” it added, dealing a blow to rival operators such as Bharti Airtel Ltd.

Setback for rivals

The clarification may limit the chances of other telecom companies from citing the order as a precedent to seek similar relief or government intervention in their own AGR disputes.

Earlier, a government official had told Mint that the fine print of the order “will guide us on the direction we need to take on any possible relief,” for Vodafone Idea alone, or for other telcos as well.

A second official said Vodafone Idea would need to inform the government of the relief it expects once the order is in, adding that the extent of relief would be decided after studying the order and internal discussions.

Analysts at brokerage Emkay Global said the Centre will now have sufficient room to devise a plan for Vodafone Idea’s long-term sustainability.

“We note that leverage for Vodafone Idea remains higher even without AGR dues, and the government will need to consider plans toward reducing the spectrum debt as well,” Emkay Global said in a 27 October note. The brokerage house said it sees a low chance of the government reversing the current outstanding ₹37,100 crore AGR dues of Bharti Airtel.

The Vodafone Idea case

The court on Monday disposed of Vodafone Idea’s plea after solicitor general Tushar Mehta handed over a proposal to the bench, noting that the Centre already holds a 49% stake in the company and may consider additional measures to support it.

Senior advocate Mukul Rohatgi, appearing for Vodafone Idea, expressed satisfaction with the government’s assurance, leading to the closure of this petition by Vodafone Idea in the long-running legal dispute over AGR dues.

In its petition filed on 8 September, the telco had challenged the DoT’s fresh demand of ₹9,450 crore for the years up to 2018-19, including ₹2,774 crore raised against Vodafone Idea (post-merger) and ₹6,675 crore against the erstwhile Vodafone Group entities.

“In this sum of approx ₹9,450 crores, the majority amount of approx ₹5,606 crores (as on 31.03.2025) is for the period up to 2016-17, which has already been crystalized by this Hon’ble Court,” it said in its petition.

In an amended petition, the telco also sought a waiver of penalties and interest on AGR dues, arguing that the disputed components of the dues have yet to be finalized.

The company argued that the Supreme Court’s 2020 judgment had already finalized AGR dues till 2016-17 based on the DoT’s calculations, and that no re-assessment or self-assessment was permitted. However, it said the additional demands were raised with penalties and interest up to 2019 and updated until March 2025, with interest calculated at 8% per annum.

Vodafone Idea, which owes around ₹83,400 crore in AGR dues and has total government liabilities estimated at nearly ₹2 trillion, had earlier warned that the burden threatens its survival and the livelihoods of thousands of employees. It employs over 18,000 people and serves about 198 million subscribers.

Its former chief executive, Akshaya Moondra, said in August that early resolution of the AGR dispute was crucial for the company to secure bank funding and restore cash flows.

On 29 October, Vodafone Idea’s shares closed 0.6% lower at ₹9.38, while those of Bharti Airtel closed 0.5% higher at ₹2,100 on National Stock Exchange..