Vodafone Idea gets a major lifeline as the Supreme Court allowed the Central government to reconsider the issue of Adjusted Gross Revenue (AGR). AGR is a metric of the Department of Telecommunications (DoT) in India that is used to calculate license fees and spectrum usage charges paid by the telecom operators.
A bench led by Chief Justice of India B.R. Gavai and Justice K. Vinod Chandran allowed the Union government to examine the matter once more. The court's decision came after the Centre itself, represented by Solicitor General Tushar Mehta, submitted that it was willing to review the dues.
The government's nature was attributed to a huge change in circumstances. Mr. Mehta informed the court that the Centre is now the largest stakeholder in Vodafone Idea, holding a 49% equity stake after a debt-to-equity swap. He also stressed that the interests of over 20 crore customers who rely on Vi's services were a primary concern.
“Taking into consideration the status of the case now, the government has infused substantial equity and further, that the issue involved is likely to have a direct bearing on the interests of 20 crore customers, we see no issue in the Union reconsidering the issue," the bench observed, disposing of the writ petition filed by Vi.
The Supreme Court clarified that the matter falls within the policy domain of the Union government and that its order was passed only due to these peculiar facts and circumstances.
Vodafone Idea had approached the court to challenge fresh demands from the Department of Telecommunications (DoT), including a notable sum of rupees 5,606 crore, referring to the 2016-17 financial year. The company argued that these additional demands were unjust, claiming they involved computational errors and duplicate entries for liabilities that had already been cleared by the Supreme Court's landmark 2019 AGR judgment.
This ruling is a significant departure from the court's previous hard-line stance. In July 2021, the Supreme Court had dismissed pleas from Vodafone Idea and other telcos seeking correction of alleged arithmetical errors in the DoT's AGR calculations.
The original 2019 judgment, which upheld the DoT's broader definition of AGR to include non-telecom revenue, had pushed Vodafone Idea to the brink of financial collapse. Today's relief was met with immediate investor optimism, as Vodafone Idea's stock surged over 11% to hit a new 52-week high in morning trade.
