AGR Fiasco: ‘Our Petition Had Significant Merits,’ Claims Vodafone Idea
Vodafone Idea seeks government intervention on AGR issues after Supreme Court dismisses curative petition. The debt-laden telecom firm remains hopeful for relief through government support.
Vodafone Idea Ltd. has said that the Supreme Court's dismissal of its curative petition in the adjusted gross revenue case was based on a mere technicality and that all its hopes are now dependent on the government to get the debt-laden company out of this flux.
"The AGR curative dismissal was unexpected, but we continue to find a solution for this," said Akshaya Moondra, Chief Executive Officer at Vodafone Idea.
Moondra made his remarks during the earnings call following the release of Vodafone Idea's September quarter results for the financial year ending March 2025.
Moondra stated that the top court never considered the AGR curative on its merits and rejected it based solely on a technicality. He added that Vodafone Idea is hopeful that the government recognises this. "Lenders are also closely looking at the AGR matter," he said.
He remarked that the telecom operator's AGR petition had significant merits.
The Story So Far
Adjusted gross revenue, or AGR, is the basis for a revenue-sharing mechanism between the government and the telecom operators.
Under this mechanism, the operators have to pay a certain licensing fee and spectrum usage fee to the Department of Telecommunications. The DoT calculates the fee as a percentage of the AGR. However, the definition of what constituted AGR had been a pain point since 2005.
In October 2019, the Supreme Court ruled that non-core revenues must be included while calculating the AGR, ending a 14-year-long legal battle between mobile operators and the government over the definition of the AGR.
The 2019 judgment dealt a crippling blow to the industry, which faced dues and penalties worth thousands of crores. It had increased the liabilities of Bharti Airtel and Vodafone Idea to more than Rs 90,000 crore.
This prompted the telcos to file curative petitions before the court, alleging several inadvertent clerical and arithmetical errors in the demands. They also alleged that the court exceeded its jurisdiction by ruling that the telecom operators would be liable to pay a penalty of 50% of the entire amount of short payment, along with interest on the said penalty, at a rate that will be 2% above the prime lending rate of the State Bank of India.
In September this year, the top court rejected telecom operators' plea seeking a reconsideration of the verdict, hammering the final nail in the coffin.
