Supreme Court Dismisses Telecom Companies’ Petition Challenging AGR Dues Payment to Government

ICRA Estimates Vodafone Idea and Bharti Airtel’s Outstanding AGR Dues at Rs. 1 Lakh Crore, Including Spectrum and License Fees

India’s Supreme Court on Thursday rejected a petition by telecom operators, including Vodafone Idea and Bharti Airtel, to review the calculation of their adjusted gross revenue (AGR) dues owed to the government. The decision marks the end of a long legal battle for the debt-ridden companies. Following the ruling, shares of Vodafone Idea and other telecom firms fell, signaling concerns over their financial stability and future operations.

ICRA analysts estimate that Vodafone Idea and Bharti Airtel collectively owe a staggering ₹1 lakh crore ($12 billion) in dues, which include spectrum charges and licensing fees. This ruling upholds the telecom department’s earlier assessment of the AGR dues, a calculation that has been contested by the companies for over a decade. However, analysts did not specify the dues for other telecom firms.

The dispute originated from a broad definition of AGR used by the Department of Telecommunications (DoT), which included non-telecom revenue sources, leading to much higher dues for the telecom companies. In 2021, the Supreme Court had already ruled against the telecom operators, leaving little room for further recourse.

Vodafone Idea, already struggling with a massive debt load, faces a particularly grim outlook following this ruling. The company has been seeking government relief and external investment to remain operational. Bharti Airtel, though in a stronger financial position than Vodafone Idea, will also need to manage its large AGR liability carefully.

The Supreme Court’s decision is likely to push Vodafone Idea closer to the brink of collapse unless it secures additional financial aid or a bailout. Bharti Airtel, on the other hand, is expected to absorb the impact, given its stronger balance sheet and market position.

This verdict may prompt the government to rethink its long-term strategy for the telecom sector, given the potential risk of losing a major player like Vodafone Idea, which could reduce competition and affect consumers in the long run