Government willing to negotiate regarding AGR relief for Vodafone Idea
Vodafone Idea Seeks Supreme Court Hearing on AGR Demand
In a significant development, telecommunications company Vodafone Idea has filed a plea with the Supreme Court against a new AGR demand of Rs 9,450 crore from the Department of Telecommunications (DoT). The court has agreed to hear the case on September 26.
The demand, which cites unpaid licence fees and spectrum charges up to FY19, has raised concerns for the company. Vodafone Idea faces AGR liabilities of about Rs 83,400 crore, with annual instalments of Rs 18,000 crore beginning March 2026.
In its petition, Vodafone Idea has urged the court to quash the claim or direct a reconciliation of accounts. The company argues that Rs 5,606 crore of the new demand overlaps with periods already settled under the 2020 order.
The latest case against Vodafone Idea originates from the SC's March 2020 order. The government, represented by Solicitor General Tushar Mehta, did not oppose Vodafone Idea's petition.
The government has previously converted dues worth Rs 53,083 crore into equity for Vodafone Idea, making it the company's largest shareholder with 48.99%. This move was aimed at helping the telecom giant stay afloat.
The company's 198 million subscribers and 18,000 employees could be affected if Vodafone Idea is saddled with further dues. The company has warned that further payments could jeopardise its ability to remain a going concern.
Meanwhile, the Supreme Court bench, led by Chief Justice B R Gavai, expressed concern about the question of finality in the proceedings, as repeated litigation could undermine settled orders. The bench also expressed concern about the potential impact on the telecom sector.
Interestingly, Vodafone Idea's stock surged 7.13% to Rs 8.41 on the BSE, while Bharti Airtel also gained, closing at Rs 1,962.35 (up 1.05%).
Discussions are underway to find a way forward for Vodafone Idea, given that the government now holds a near-50% stake in the company. The outcome of these discussions could have a significant impact on the telecom industry in India.
The Supreme Court hearing on September 26 promises to be a crucial moment for Vodafone Idea, as the company seeks clarity on its AGR liabilities and a path forward to financial stability.
