Vodafone Idea Moves Supreme Court Against Rs 9,450 Crore AGR Demand Amid Financial Struggles
Vodafone Idea recently approached the Supreme Court and prayed to set aside an additional AGR demand of Rs 9,450 crore made by the Department of Telecommunications (DoT). The company says this extra amount goes beyond what the Court had decided earlier about how much it owes in AGR (Adjusted Gross Revenue) dues.
The writ petition was filed by the company Vodafone Idea against the Department of Telecommunications’ (DoT) revised calculations of what it owes. These new figures include unpaid dues up to the financial year 2016-17 and updated licence fees for both Idea Cellular and Vodafone Idea up to 2018-19.
These revised dues are part of the government’s AGR payment moratorium, which means Vodafone Idea is not required to pay them until March 31, 2026. After that, it will need to start paying in instalments.
In the latest assessment, the Department of Telecommunications (DoT) imposed an additional demand of Rs. 2,774 crore for the financial year 2018-19. The company disagreed with this calculation and said some amounts had been added twice and needed to be corrected. The company has prayed the court to direct the department to freshly consider the case and recalculate all liabilities, beginning from the financial year 2016-17.
As per the writ petition, out of the total of Rs 9,450 crore demand, Rs 2,774 crore belongs to the post-merger entity, i.e., Idea Group and Vodafone Idea, since they joined in August 2018. The remaining Rs. 5,675 crore is for the Vodafone Group’s liabilities from before the merger.
The company further claimed that the total demand that is scheduled to be paid by March 31, 2026, includes a significant portion of around Rs 5,606 crore (that was scheduled to be paid by March 31, 2025) for liabilities upto the financial year 2016-17, and this matter has already been resolved by the Supreme Court.
The Supreme Court is expected to hear Vodafone Idea’s petition in the next few weeks. On March 18, 2020, the Supreme Court fixed Vodafone Idea’s AGR dues up to the financial year 2016-17 based on calculations by the Department of Telecommunications (DoT). The Court also said there would be no self-assessment or reassessment of these dues.
However, Vodafone Idea said in its petition dated September 8 that the DoT is now asking for extra payments for the years up to 2018-19. Vodafone Idea owes the government about Rs. 83,400 crore in AGR dues, with annual payments of around Rs. 18,000 crore starting in March. In total, including penalties and interest, the company’s dues to the government amount to about Rs. 2 trillion.
The company has asked the Supreme Court to cancel the DoT’s additional demands for AGR payments up to 2017 and to order a full reassessment and reconciliation of all dues for that period. AGR (Adjusted Gross Revenue) is the part of a telecom company’s revenue that is used to calculate regulatory payments.
Vodafone Idea said that this new demand will make its financial problems worse. The company is currently trying to raise money to improve its 4G network and speed up its 5G rollout to compete with Reliance Jio and Bharti Airtel. The huge AGR dues threaten the company’s survival and the jobs of thousands of people working directly or indirectly for it, Vodafone Idea said in the petition. The company has nearly 198 million users and over 18,000 employees.
According to Vodafone Idea’s petition, the DoT’s extra demand is for licence fees (which are a percentage of AGR). If extra charges for using spectrum (airwaves) up to 2017 are also included, the total amount is around Rs. 6,800 crore as of March 31, 2025. Vodafone Idea is currently in advanced talks to raise about Rs. 5,000 crore in debt funding to strengthen its capital as part of its efforts to recover.
This money will be raised through the company, i.e., Vodafone Idea Telecom Infrastructure Limited, a subsidiary that owns some of the company’s telecom infrastructure and renewable energy assets. JM Financial has been appointed to the role of advisor, and the deal is anticipated to end within two weeks.
If this deal goes through, it will be an important step for Vodafone Idea to regain its financial stability. The company has been struggling due to hefty liabilities, fewer subscribers, and the Supreme Court’s AGR ruling. The funds raised will be used for capital spending, such as expanding the network and rolling out 5G in selected areas. This will ultimately help the company to stay competitive in India’s fast-growing data market through the first half of 2026.
Although the government converted over Rs. 53,000 crore of Vodafone Idea’s dues into equity to give temporary relief to the company, the company still needs new funding to compete with leading companies Reliance Jio and Bharti Airtel.
