Supreme Court dismisses telecom firms plea on adjusted gross revenue

Vodafone India, Bharti Airtel, and other telecom firms have filed a curative petition challenging the court's October 2019 verdict, which mandated that they pay the government Rs 92,000 crore within three months.

In Short

• Supreme Court rejects telecom firms' adjusted gross revenue refigure plea
• Firms challenge 2019 verdict to pay Rs 92,000 crore
• Claim Centre made calculation errors and imposed 'arbitrary penalties'

The Supreme Court on Thursday dismissed a petition filed by telecom companies to refigure adjusted gross revenues (AGR) amid a long-standing dispute over payment of dues to the government.

Vodafone India, Bharti Airtel, and other telecom firms have filed a curative petition challenging the court's October 2019 verdict, which mandated that they pay the government Rs 92,000 crore within three months.

In their petition, the telecom firms argued that the Department of Telecommunications (DoT) made a significant error in calculating these dues, which include licence fees and spectrum charges.

The firms also claimed that the top court had imposed "arbitrary penalties" on them.

AGR determines how telecom firms share revenue with the government, which earns money from licences and spectrum use.

The DoT calculates the government’s share based on a percentage of AGR: three to five percent for spectrum usage fees and eight percent for licencing fees.

The calculation of AGR has been disputed for almost 20 years. Telecom companies argue it should only cover core revenue, while the government includes all revenue, even non-telecom income.

In 2019, the top court ruled in favor of the government, ordering telecom companies to pay Rs 92,000 crore within 180 days. This hit the industry hard, with Vodafone India and Bharti Airtel reporting record losses soon after.

In July 2022, Airtel deferred payment of about Rs 3,000 crore in AGR dues from the financial year (FY) 2018/19, not included in the 2019 court order, by four years. Vodafone also postponed payment of Rs 8,837 crore in additional AGR dues by four years.

These delays followed the DoT's demand for AGR payments for two financial years beyond 2016/17, which were not part of the Supreme Court's ruling. Telecom operators owe over Rs 1.65 lakh crore in AGR dues as of FY 2018/19.