SC Defers Vodafone Idea ₹5,606 Crore AGR Dues Hearing to Oct 13

Supreme Court Defers Vodafone Idea’s ₹5,606 Crore AGR Dues Hearing to October 13 Amid Talks of Resolution

Centre and Vodafone Idea Seek More Time; Government’s 50% Stake in Telco Adds to Case Sensitivity

AGR Dispute Remains Telecom Industry’s Biggest Legal Battle; Relief Could Decide Vodafone Idea’s Survival

By Our Legal Reporter

New Delhi: October 11, 2025:

The Supreme Court of India has deferred to October 13, 2025, the hearing on Vodafone Idea Limited’s (VIL) plea challenging the Department of Telecommunications’ (DoT) fresh demand of ₹5,606 crore in Adjusted Gross Revenue (AGR) dues for the financial year 2016–17.

The matter was listed before a bench headed by Chief Justice of India BR Gavai and Justice K. Vinod Chandran. Solicitor General Tushar Mehta, appearing for the Union government, requested more time to explore a possible resolution, a request supported by senior advocate Mukul Rohatgi, representing Vodafone Idea.

The court agreed to adjourn the matter, noting that both sides wanted to attempt a settlement before the Diwali vacation.

What Is the Case About?

Vodafone Idea has filed a fresh petition seeking to quash the DoT’s additional AGR demand of ₹5,606 crore. The company argues that the demand is unjustified and seeks directions for the DoT to:

“Comprehensively re-assess and reconcile all AGR dues for the period up to FY 2016–17 in line with the Deduction Verification Guidelines dated February 3, 2020.”

The company maintains that the new demand overlaps with dues already settled under earlier Supreme Court orders.

AGR Dispute: A Long Battle

The AGR issue has been one of the most contentious legal and financial battles in India’s telecom sector.

Definition of AGR: AGR is the income figure used by the DoT to calculate licence fees and spectrum usage charges. Initially, AGR included both telecom and non-telecom revenues (such as interest income, asset sales, and rent).
2019 Supreme Court Ruling: In October 2019, the Supreme Court upheld the DoT’s definition, significantly increasing the liabilities of telecom operators.
2020 Payment Schedule: In September 2020, the court allowed telecom companies to pay their dues over 10 years—with 10% upfront by March 2021 and the balance in annual instalments until March 2031.
2021 Setback: In July 2021, the Supreme Court dismissed pleas by Vodafone Idea and Bharti Airtel seeking rectification of alleged errors in AGR calculations, ruling that the DoT’s demand was final and not open to reassessment.
2021 Policy Change: Later in 2021, the government amended rules to exclude non-telecom income from AGR calculations, reducing future liabilities but leaving past dues intact.

Why This Hearing Matters

The fresh demand of ₹5,606 crore has reignited the AGR controversy. For Vodafone Idea, the stakes are particularly high:

The company is already burdened with massive debt and struggling to raise funds.
The government now holds nearly 50% equity in Vodafone Idea after converting part of its dues into equity in 2023, making it a direct stakeholder in the telco’s survival.
Any relief from the Supreme Court could ease financial pressure and help the company attract investors.

Solicitor General Mehta told the bench:

“Some solution may have to be found out, subject to your lordships’ approval. If it can be kept next week, we can think of some solution.”

Market Impact

The uncertainty around the case has already impacted Vodafone Idea’s stock performance.

On October 6, 2025, shares of Vodafone Idea fell by nearly 4% after the Supreme Court again deferred the hearing.
The stock touched an intraday low of ₹8.33, down 5.5%, before recovering slightly.
Market experts remain divided: while some see potential for a rebound if relief is granted, others caution that the stock remains risky given the company’s financial stress.

Government’s Dual Role

The case is unique because the government is both a regulator and a shareholder in Vodafone Idea.

As regulator, the DoT is pressing for recovery of dues.
As shareholder, the government has a vested interest in ensuring the company’s survival, since its collapse could destabilize the telecom sector and hurt public investments.

This dual role has led to speculation that the Centre may push for a middle-ground solution that balances revenue recovery with the need to keep Vodafone Idea afloat.

Vodafone Idea’s Arguments

Vodafone Idea has consistently argued that:

The DoT’s fresh demand contains arithmetical errors and duplication of entries.
A significant portion of the dues pertains to periods already settled by the Supreme Court in its March 2020 order.
The company should be allowed reconciliation of accounts under the Deduction Verification Guidelines of 2020.

Senior advocate Mukul Rohatgi, appearing for VIL, stressed that the company is not seeking to reopen settled issues but only to correct computational mistakes.

Broader Industry Context

The AGR dispute has affected the entire telecom industry:

Bharti Airtel also faced massive AGR liabilities but has managed to raise funds and strengthen its balance sheet.
Reliance Jio, with lower legacy dues, has emerged stronger, consolidating its market position.
Vodafone Idea, however, remains the most vulnerable, with its survival hinging on regulatory and judicial relief.

Industry experts warn that if Vodafone Idea collapses, India could effectively become a duopoly, reduce competition and potentially raising tariffs for consumers.

What Happens Next?

The Supreme Court will now hear the matter on October 13, 2025. Possible outcomes include:

Relief for Vodafone Idea: The court could direct the DoT to reassess the dues, providing financial breathing space for the company.
No Relief: The court could uphold its earlier stance that AGR dues are final, leaving Vodafone Idea with no option but to pay.
Middle Path: The court could encourage a negotiated settlement between the government and the company, given the government’s equity stake.

Conclusion

The Supreme Court’s decision on Vodafone Idea’s ₹5,606 crore AGR dues will be a defining moment for India’s telecom industry. It will test the balance between judicial finality, regulatory authority, and economic pragmatism.

For Vodafone Idea, the outcome could determine whether it survives as a viable third player in India’s telecom market or faces further decline. For the government, the case is a delicate balancing act between revenue recovery and protecting its own investment in the company.

As the October 13 hearing approaches, all eyes will be on the Supreme Court, whose ruling could reshape the future of India’s telecom sector.