India’s Supreme Court rejects latest operator AGR relief plea

Details: Vaughan O'Grady; Category: Regulation; 20 May 2025; 4917 views

The extraordinarily long and complex story of the Indian government's adjusted gross revenue (AGR) payment demands on operators continues to make headlines with Monday’s news that India’s Supreme Court has rejected pleas from operators Bharti Airtel and Vodafone Idea to support a waiver on their AGR dues.

Specifically, the petitions seek a waiver of interest and penalties on AGR dues (which are used to calculate licence fees), a plea that, according to India’s Economic Times, the Supreme Court bench described on Monday as “misconceived”.

This follows the March decision (reported here) that India’s Department of Telecommunications (DoT) had dropped a plan to waive AGR dues for operators.

Vodafone Idea was the first to seek Supreme Court support for a waiver – of more than INR450 billion (about US$5.3 billion). Bharti Airtel was next, saying it was seeking relief for both Bharti Airtel and its Bharti Hexacom subsidiary on an “equitable basis”. The waiver in this case would have been INR347.4 billion (about US$4.07 billion).

Discussing Vodafone Idea specifically, India’s Economic Times reports that the petition says: “Due to the enormous AGR liability and no bank funding, Vodafone’s very survival is at risk. Any disruption in services will have a direct and far-reaching bearing on approximately 200 million subscribers.”

This may sound a touch apocalyptic, but Vodafone Idea is probably right to say that the government has “a vital stake in the survival of the company”.

Indeed the government is now a part owner of the operator, having already provided substantial relief to Vodafone Idea by converting some of its dues into equity. All of Vodafone Idea’s debts to the government put together may add up to well over US$20 billion, although this clearly isn’t the total financial liability of the operator; it doesn’t for instance include money owed to suppliers and planned 5G and general network expenditure.

As for AGR, a big issue has been a 2019 Supreme Court ruling widening the definition of AGR, increasing liabilities for telecom operators (and confirmed in subsequent judgements). However, in one form or another, the AGR saga has been rumbling on for many years – all the way back to 1999 in fact.