Vodafone Idea says AGR dues 60% less than DoT estimate

Vodafone Idea, one of India’s biggest telecom operators, today said that the dues that it has to pay pursuant to a recent Supreme Court decision works out to Rs 21,533 cr. This is about 60% less than the Rs 53,000 cr that Department of Telecom has calculated.

“Following the approval of the Board of Directors of the Company (Board) at its meeting held on 4 March, 2020 the Company has today filed its self-assessment of the AGR liabilities with the Department of Telecommunications. The self-assessment discloses the Company’s AGR liabilities to aggregate Rs.21,533 crores including a principal amount of Rs 6,854 crores for the period from FY 2006-07 to FY 2018-19 and interest up to February 2020,” it said.

It was in October last year that the Supreme Court said that all companies that have signed a telecom licensing agreement with the government of India must pay a share of their total revenue, and not just their telecom revenue, as part of the telecom license agreement.

Soon after this judgment by a bench headed by Justice Arun Mishra, the DoT sent demand notices to all companies that have taken telecom licenses from it, including Vodafone Idea, Bharti Airtel, GAIL India, Delhi Metro Corporation Ltd and Oil India Ltd.

In all, the Department of Telecom has demanded over Rs 3.5 lakh crore from these companies, including around Rs 53,000 cr from Vodafone Idea, around Rs 38,000 from Bharti Airtel and Rs 1.7 lakh cr from GAIL India Ltd.

Bharti Airtel too recently stated that it owed only Rs 13,004 cr, and not Rs 38,000 cr, as demanded by DoT.

The matter is now likely to be argued before the Telecom Disputes Redressal and Appellate Tribunal or TDSAT, the forum where all industry disputes from the telecom and broadcasting sector are resolved.

Bharti has already paid around Rs 10,000 cr as its share of the dues, while Vodafone Idea has paid around Rs 3,500 cr.


In October, a Supreme Court bench headed by Justice Arun Mishra asked companies such as Vodafone Idea, Bharti Airtel and others to pay nearly Rs 1 lakh cr by ruling that any company that has a telecom license must pay a part of all its revenue — whether from telecom or not — to the Department of Telecom.

Companies had earlier not been paying a share of their revenue from unrelated activities — such as retailing, media, oil and gas and so on — to the Department of Telecom, pointing out that these businesses are not conducted under license from DoT and are therefore not covered by the telecom license.

However, the Supreme Court bench disagreed with this, and said the companies’ telecom license requires them to pay to DoT a share of all their revenues, even if the revenues had nothing to do with the telecom license.

The bench headed by Justice Arun Mishra later came down hard on the DoT for giving time to companies to pay back the humongous amounts, and threatened to take action against DoT and company officials.

The biggest liability of the ruling has fallen on pipeline operator GAIL India Ltd, which has been slapped with a demand for around Rs 1.7 lakh cr, followed by Vodafone Idea, which faces a demand for Rs 53,000 cr, and Bharti Airtel, which has been asked to pay around Rs 38,000 cr.

Vodafone Idea, which had estimated cash reserves of only around Rs 10,000 cr, has already paid around Rs 3,500 cr.

It has repeatedly said that it has no money to pay the amounts demanded by the government, and will cease to be a ‘going concern’ if legal action is taken to secure the payment, implying that it will go bankrupt and shut down.

It repeated this stand as recently as in its quarterly investor update last month.

“..material uncertainty exists that cast significant doubt on the company’s ability to continue as a going concern and its ability to generate the cash flow that it needs to settle, or refinance its liabilities including those relating to the SC AGR Judgement and guarantees as they fall due,” Vodafone Idea said last month.

The company has also repeatedly asked the government to make some arrangement so that it does not have to shut down.