AGR dues: SC rejects curative plea by telecom operators

NEW DELHI:  The Supreme Court of India has dismissed a curative plea filed by major telecom service providers, including Bharti Airtel and Vodafone Idea, challenging the court’s October 2019 ruling on Adjusted Gross Revenue (AGR) dues. This dismissal reaffirms the court’s earlier decision, which upheld the Department of Telecom’s (DoT) directive to recover approximately Rs92,000 crore from the telecom operators.

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In its landmark October 2019 judgment, the Supreme Court had endorsed the DoT’s interpretation of AGR, a measure used to calculate various regulatory fees.

The ruling emphasised that the telecom sector, having enjoyed the benefits of the government’s liberalised revenue-sharing regime, had failed to adhere to the agreed-upon payment obligations.

Long-drawn legal dispute

This legal dispute, which spans nearly two decades, revolves around the calculation of AGR and the corresponding fees that operators owe the government.

The October 2019 decision mandated that telecom operators settle their AGR dues within a stipulated period, leading to substantial financial implications for the sector.

Following the ruling, the telecom companies faced a staggering bill of around Rs1.4 lakh crore, which they are required to pay within three months.

Industry experts and analysts have expressed concerns that this significant financial burden could exacerbate the already strained conditions within the telecom sector.

Endorsing previous stance

The Supreme Court’s dismissal of the curative plea reinforces its previous stance, asserting that no telecom operator can dispute the AGR dues based on the court’s October 2019 judgment.

The decision underscores the court’s commitment to ensuring compliance with regulatory obligations and maintaining the integrity of the revenue-sharing framework.

As the telecom sector grapples with these financial challenges, the industry’s response and the potential impact on market dynamics remain critical points of interest.