Bharti Airtel has signalled its intention to request government intervention for relief on its adjusted gross revenue (AGR) dues, following a favourable judgment for Vodafone Idea. The move underscores renewed pressure on telecom operators to resolve long-standing regulatory liabilities. Moneycontrol
What has happened
- The Supreme Court of India clarified that the government can reconsider and reconcile all of Vodafone Idea’s AGR liabilities up to FY 2016-17, including interest and penalties.
- In response, Airtel said it will approach the Department of Telecommunications (DoT) for a similar reassessment, since its own AGR dues are large: DoT calculation ~₹ 44,000 crore vs Airtel’s internal estimate ~₹ 13,000 crore.
- Airtel’s Vice-Chairman & MD, Gopal Vittal, said the company is “pleased” the court allowed reconciliation of dues, and will take the matter to the government in coming days.
Why it matters
- AGR dues have been a major drag on telecom firms in India. The original 2019 judgment broadened the definition of revenue for fee calculation, creating large liabilities.
- Airtel’s approach signals that major players are now pushing for parity—if Vodafone Idea gets relief, others may claim similar treatment.
- A reassessment or relief could ease financial burdens, freeing up funds for telecom investment (e.g., 5G rollout), but it also raises public-policy questions about fairness and fiscal impact.
Key figures
- DoT-calculated dues for Airtel: ~₹ 44,000 crore.
- Airtel’s own assessment of dues: ~₹ 13,000 crore.
- Airtel has already made payments totalling ~₹ 18,000 crore, including an ad-hoc payment of ~₹ 5,000 crore.
- Vodafone Idea’s total AGR liabilities: ~₹ 83,400 crore (before interest/penalties) as per reports.
What Airtel is asking for
- A reassessment/reconciliation of its AGR dues, including interest and penalties, similar to what Vodafone Idea may be eligible for.
- Previously, Airtel had asked for converting AGR dues into equity, akin to how Vodafone Idea’s spectrum dues were converted to government equity.
Challenges & Considerations
- Though the court has permitted reassessment for Vodafone Idea, the relief does not yet automatically apply to Airtel—it must be granted by the government via policy or order. mint
- Government revenue implications: Large waivers or reassessment could reduce future licence/spectrum fee inflows for the state.
- Precedent & fairness: Granting one major player relief may raise demands from others in sector.
- Telecom sector health: Relief might help Airtel accelerate investment, but the sector remains highly competitive and capital-intensive.
Outlook
In the near term:
- Airtel will likely formally request the DoT for reassessment in the coming days.
- Government deliberations may include how much relief is feasible, for how many firms, and under what conditions.
- Market reaction: Airtel’s share price has already shown modest uptick on such news.
Longer term:
- If relief is granted, Airtel could allocate more capital toward network expansion and digital infrastructure.
- If not, the company must continue managing large liabilities, which may influence pricing, investment, or debt profile.
- Industry-wide, the resolution of AGR dues could lead to clearer regulatory policy and improved investor confidence.
