Vodafone Idea AGR Dues: Centre’s Reply In SC Gives Fresh Hope to Telco Stakeholders

Vodafone Idea’s share price surged around 8% today following a Supreme Court hearing on a case filed by the telecom firm. The debt-laden company had filed a plea against the Department of Telecommunications’ (DoT) additional demand on adjusted gross revenue (AGR) dues.

The company is already expected to pay the DoT approximately ₹83,400 crore in dues related to spectrums acquired up to the financial year 2016-17 (FY17). However, earlier this month, Vodafone Idea approached the court, claiming that the telecom department had made an additional demand of ₹9,450 crore in AGR dues. The company contends that this new demand had already been “crystallised” in earlier orders issued by the apex court.

During today’s hearing, Solicitor General Tushar Mehta told the court that the Centre is seeking “some solution” to the matter, which has returned to the court multiple times.

“Not opposing Vodafone Idea’s plea; some solution is required. The government is also an equity holder. Some solution may be required, subject to Supreme Court approval,” Mehta said, representing the Centre.

His remarks came as the bench, comprising Chief Justice of India BR Gavai, Justice K Vinod Chandran, and Justice NV Anjaria, observed, “With the order passed in those four petitions… there has to be some finality to the proceedings.”

The Solicitor General noted that the government holds a 50% stake in Vodafone and is a key stakeholder. He requested an adjournment until next week, saying that the government and Vodafone were exploring a resolution.

The matter is now scheduled to be heard next Friday.

SG Mehta’s comments provided some optimism for Vodafone Idea shareholders, as the company’s shares rose as much as 9% during intraday trading. At 4:00 pm, shares were up 7.9% at ₹8.46. In Last one year, the share have droped over 18%.

What Vodafone Idea’s Plea Says

The case arises from the Supreme Court’s March 18, 2020 order, which upheld AGR dues up to FY17 as calculated by the DoT and barred any reassessment by operators. Supreme Court judgment upheld DoT’s definition of AGR and expanded the scope of annual spectrum charges to include non-core revenues of the companies. This ruling came with major retrospective financial burden on telecom operators. They were ordered to pay over Rs 1.4 lakh crore to DoT including penalties and interest.

After two round of equity conversion relief  provided by the government, Vodafone Idea now owes around ₹83,400 crore in AGR dues. It was was expected to start paying this of from next month with annual instalments of ₹18,000 crore starting in March 2026.

But, earlier this year, the DoT raised additional claims for FY18 and FY19. In its September 8 petition, Vodafone Idea argued that much of the new demand overlaps with periods already settled by the Court.

Of the ₹9,450 crore fresh demand, ₹2,774 crore is against Idea Group and post-merger Vodafone Idea, while ₹6,675 crore targets Vodafone Group for the pre-merger period.

The company stated that ₹5,606 crore of the new demand relates to periods up to FY17, which were already settled by the 2020 order. Vodafone Idea requested the Court to quash DoT’s claims for these years and direct a full reconciliation of AGR dues.

In May, a bench of Justice JB Pardiwala and Justice R Mahadevan had dismissed writ petitions by Vodafone and two other telecom companies seeking a waiver of interest, penalty, and interest-on-penalty components on AGR dues, criticising the companies for filing petitions even after the AGR litigation was concluded.