Vodafone Idea sinks nearly 10% and Airtel tumbles a bit after India’s Supreme Court denies a discount on past dues

• In a major setback to telcos Bharti Airtel and Vodafone Idea, the Supreme Court today dismissed their AGR dues re-computation appeal.
• Effectively, this confirms the Department of Telecommunications’ (DoT) AGR dues computation of ₹1.56 lakh crore.
• Together, Airtel and Vodafone Idea are liable to pay over ₹1.02 lakh crore, with the current dues standing at ₹76,315 crore.

Bharti Airtel and Vodafone Idea will have to pay up the adjusted gross revenue (AGR) dues as computed by the Department of Telecommunications (DoT), amounting to ₹1.56 lakh crore in total.

Shares of India’s leading telcos Bharti Airtel and Vodafone Idea took a nosedive – while Airtel share price was down by 1.26%, Vodafone Idea stock was down by 9.73% as of 10:45 a.m., on July 23.

To recap, the adjusted gross revenue (AGR) case concluded in September last year with the Supreme Court directing telecom companies to pay their dues over a period of 10 years.

Amongst these, Vodafone Idea leads the charts with a total demand of ₹58,254 crore, while Airtel comes in second at ₹43,980 crore.


Source: AGR dues case in the Supreme Court

The AGR case timeline

The AGR dispute might have emerged in 2003, but its roots can be traced back to the National Telecom Policy that was announced in 1994. Here’s the detailed timeline of how the AGR case came to be.

1994: National Telecom Policy announced, telecom companies expected to pay a fixed license fee each year.

1999: Telcos fail to pay the license fee, and agree to pay a percentage of their adjusted gross revenue (AGR) instead.

2003: Few telcos move Telecom Disputes Settlement and Appellate Tribunal (TDSAT) questioning the AGR definition.

October 2019: In a landmark ruling, Supreme Court rules in favour of the government, upholds DoT’s definition of AGR. The verdict required telcos to pay up AGR dues in addition to spectrum usage charges, amounting to over ₹1.56 lakh crore.

November 2019: Telcos seek a review of its October AGR ruling.

January 2020: Telcos miss the January 23 payment deadline, government bats for telcos, asks Supreme Court not to take coercive action against them.

February-March 2020: Telcos start partial payment of AGR dues.

June 2020: Supreme Court orders Vodafone Idea to cough up ₹53,000 crore, Vodafone Idea seeks a timeline of 20 years for payment.

July 2020: Supreme Court states AGR dues calculation is final, confirms demand of ₹1.56 lakh crore.

August 2020: Hearing ends, Supreme Court reserves judgment.

September 2020: Supreme Court tells telcos to pay AGR dues in 10 years.

January 2021: Airtel, Vodafone Idea approach Supreme Court for modification of AGR dues.

July 2021: Supreme Court dismisses telcos appeal, confirms AGR dues as computed by DoT.

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