AGR case explained: SC’s final call and what it means for Vodafone Idea, Airtel

Telecom AGR issue

The Supreme Court (SC) has dismissed the review petitions filed by telecom companies, including Vodafone Idea and Bharti Airtel, reaffirming its 2021 ruling that rejected corrections to the Department of Telecommunications's (DoT) calculation of Adjusted Gross Revenue (AGR) dues.

Legal avenues exhausted

With the dismissal of the review petitions, telecom companies have exhausted their legal options to challenge the AGR dues. Although a curative petition could still be filed, its chances of success are minimal. Hence, operators are now seeking a new relief package from the government.

The government is reportedly considering proposals to ease the AGR burden, as per a Moneycontrol report dated January 18. The DoT has proposed waiving 50 percent interest and 100 percent penalties, which could lead to a financial relief of over Rs 1 lakh crore for telecom operators. More than half of this relief could benefit Vodafone Idea, which is facing a severe financial distress.

If approved, the proposal could reduce Vodafone Idea’s AGR dues by Rs 52,000 crore and Bharti Airtel’s by Rs 38,000 crore, significantly improving their financial viability. The final decision now rests with the Cabinet Secretary.

What did the SC say?

The SC bench, led by Chief Justice Sanjiv Khanna and Justices Abhay S Oka and Sanjay Kumar, found no justification for reconsidering its 2021 order. The court stated:

"We have carefully perused the review petitions as also the grounds in support thereof. In our opinion, no case for review of the order dated July 23, 2021, passed in Miscellaneous Applications, is made out. The review petitions are, accordingly, dismissed. Pending application(s), if any, shall stand disposed of."

This ruling marks the final legal setback for telecom operators, reinforcing the court’s 2019 decision that upheld the government’s definition of AGR, leading to massive financial liabilities for telcos.

How did Vodafone Idea, Bharti Airtel respond?

Vodafone Idea, in a statement on February 14, said that the company and other telecom operators had filed miscellaneous applications, review petitions, and a curative petition at the SC from time to time in the AGR matter, mostly dealing with the need to allow the correction of manifest errors in AGR demands.

“These petitions mainly had been disposed of, the last being the dismissal of the curative petition for which we had intimated the Stock Exchanges on September 19, 2024. However, there was one pending Review Petition dated 23 August 2021, which has now been dismissed, which closes all AGR-related matters at the Hon’ble Supreme Court,” Vodafone Idea said.

Vodafone Idea Chief Executive Officer (CEO) Akshaya Moondra said the company is confident that the Indian government will resolve the AGR issue, given its position as the largest stakeholder in the entire exercise, adding that the telco regularly engages with the government.

Vodafone Idea, he said, has restarted discussions with banks for debt funding, but banks are also looking for some clarity on the AGR front and the final position of the government.

Bharti Airtel, in a separate stock exchange filing, confirmed that the SC had dismissed the review petitions on January 28, 2025, and that the order was uploaded on the apex court’s website on February 13, 2025. Airtel had earlier challenged the July 23, 2021 order, which dismissed the telcos’ applications seeking modifications to correct the alleged errors in DoT’s AGR calculations.

What are legal experts saying?

Legal experts believe all judicial avenues for telecom companies on AGR dues are now exhausted.

Ketan Mukhija, Senior Partner at Burgeon Law, noted that while a curative petition remains an option, its success is unlikely. Instead, telcos should focus on engaging with the government for relief measures, such as extended payment timelines, policy interventions, or financial restructuring.

Zubin Morris, Partner at Little & Co, stated that the court’s ruling effectively closes all legal avenues for recalculating AGR dues. He suggested that telecom operators could still lobby for legislative changes to redefine AGR calculations or seek broader relief from penalties and interest.

How did the AGR dispute begin?

The AGR issue dates back to a July 2021 SC ruling, which rejected telcos’ pleas to correct alleged errors in their AGR dues.

Telecom operators argued that DoT’s calculations contained “glaring errors,” where previously paid amounts were not deducted, leading to an inflated demand exceeding Rs 1 lakh crore.

Vodafone Idea claimed that DoT’s calculation of Rs 58,000 crore in dues was incorrect. As per its own estimates, the liability was Rs 21,500 crore.

Similarly, Bharti Airtel disputed DoT’s Rs 43,980 crore figure, asserting that its actual dues stood at Rs 13,000 crore.

In 2022, Airtel and Vodafone Idea had also requested a curative petition hearing in an open court, arguing that DoT’s AGR calculations contained errors. However, the SC dismissed these petitions in September 2023.

In its review plea, Vodafone Idea argued, "It is inconceivable that even errors/inadvertent additions by the respondent-DoT to the AGR dues have not been allowed to be corrected. It is a travesty of justice that the petitioner is restrained from questioning arithmetical errors/omissions, which are going to cost the petitioner approximately Rs 25,000 crore (Rs 5,932 crore of principal plus interest, penalty, and penalty interest)."

What relief has the govt provided in the past?

In a previous relief measure, the government had announced a four-year moratorium on AGR dues, which is set to expire in October 2025.

Under the SC’s September 1, 2020 order, telcos were required to pay 10 percent of their dues upfront by March 31, 2021, with the remaining amount spread over 10 years (until 2031).

Telcos had to make 10 percent annual payments of their dues by March 31 each year.
So far, Bharti Airtel has paid Rs 18,000 crore, while Vodafone Idea has paid Rs 8,000 crore.

Telcos have consistently sought further relief, particularly in the form of waiving penalties, interest, and interest on penalties, which make up nearly 75 percent of the Rs 1.47 lakh crore AGR dues. Of this, Rs 92,642 crore pertains to licence fees, while Rs 55,054 crore relates to spectrum usage charges.

With the legal battle over, the future of the telecom industry now depends on whether the government steps in with additional financial relief.