Why Is Airtel Filing Review Petition In Supreme Court For Recalculation Of AGR Dues?

The issue of Adjusted Gross Revenue (AGR) is not going to end soon, as Airtel has again filed a review petition in the apex court. This development comes soon after Vodafone-idea filed the same petition in the Supreme Court, as both telecom operator believes that there are some errors in the DoT calculations.

AGR Dues Battle

It is worth noting that the AGR is not as new as it started in 2005 when COAI raised objections against the definition. The telecom operators filed a case in the Supreme Court against the AGR definition, which includes profit from the sale of assets, interest income, value-added services, interest income, dividend, and insurance claim.

In fact, you'll be surprised to know that both TRAI and TDSAT supported telecom companies and excluded non-telecom items from the AGR definition; however, DoT is against these recommendations. In October 2019, the Supreme Court asked telecom operators to pay Rs. 1.47 lakh crores of dues.

Vodafone-Idea Filed Review Petition In Supreme Court

Vodafone-Idea recently said that it will ensure that AGR dues can be fixed. The telecom operator filed a petition on August 11, 2021, against the Supreme Court order on July 23. Notably, the company said that it will again file a curative petition if its plea was rejected.

"If our review petition is rejected by the Supreme Court, we do have the ability to file a curative petition, and we certainly intend to do so, although we hope it doesn't come to that," managing director Ravinder Takkar said during the call.

For the unaware, the telecom operator has to clear Rs.58,254 crores of dues to the Department of Telecommunications. In addition, analysts expect that the telecom operator needs to increase its ARPU to Rs. 200 to stay in the industry.

"Given that it already has net debt of Rs. 1,155 billion, it may be a stretch to make substantial payment upfront or make payment over the tenure of 10 years in a staggered way. This may require the introduction of floor pricing/ tariff hike and other relief measures from the government," Axis Capital report had said.

The latest move by Airtel might force Tata teleservices to file a petition in court. But we will have to wait for the Supreme Court's decision as it has rejected the review petition twice.