What you see the outcome of the AGR judgment on 23 July on Bharti Airtel and Vodafone Idea?

The news was not great for the two telecom companies on 23 July after the Supreme Court dismissed the petitions of Vodafone Idea and Bharti Airtel seeking correction of a number of alleged errors in calculating the dues linked to AGR. Clearly, Vodafone which is already in a financial crisis of sorts, is likely to be impacted more than Bharti. Banks will also have concerns as Vodafone already has loans to the tune of Rs.180,000 crore in their books.

Vodafone Idea had estimated its AGR dues at Rs.21,500 crore after paying Rs.7,800 crore to the DOT. However, that is way short of the DOT estimate of Rs.58,000 crore as total AGR liability of Vodafone Idea. In the case of Bharti Airtel, it has estimated its balance AGR dues at Rs.13,000 crore after paying Rs.18,000 crore. However, the DOT estimates for Bharti Airtel dues are closer to Rs.44,000 crore. SC has ruled out any review of these figures.

In September 2020, the Supreme Court had allowed telecom companies to pay the overdues over a period of 10 years. However, the contention of Bharti and Vodafone is that there were cases of erroneous calculations, disallowance of genuine exemptions and double charge levy. Of course, both the telecom companies are free to take up this rectification issue directly with the government or they can pay under protest and proceed legally later.