Supreme Court’s written order on Vodafone Idea sparks debate on scope of AGR relief

While the order allows the Centre to reconsider the company’s dues, its wording has raised several questions about whether the Department of Telecommunications (DoT) can go beyond the narrow scope of the additional AGR demand.

The judgment, uploaded on Wednesday, indicates that Vodafone Idea’s plea is limited to challenging the additional AGR demand of about ₹9,400 crore and does not extend to the total AGR dues. The order makes no reference to the company’s earlier plea seeking a waiver of penalty interest and interest on penalty dues, suggesting that the apex court’s consideration was confined only to the reassessment of the additional amount.

This distinction has become critical because the additional demand of ₹9,400 crore is small compared to the company’s overall AGR liability, which runs into several tens of thousands of crores. The language of the court’s order appears to restrict the DoT’s ability to revisit the entire AGR computation, leaving open the question of whether the department can move beyond the limited scope of the additional dues.

The order also takes note of Vodafone Idea’s unique position in the sector, pointing out that the government holds a 49% stake in the company and that it services nearly 20 crore customers. This has fuelled speculation about whether any relief that the government may consider could be confined to Vodafone Idea alone or be extended across the sector, including to other operators such as Bharti Airtel.

Officials in the telecom ministry are expected to study the order closely before deciding on the next steps. Early indications suggest that the DoT may await further legal clarity before making any policy move, given the implications such a decision could have for the broader telecom industry.

The Supreme Court’s order, while clarifying the narrow scope of Vodafone Idea’s plea, leaves open crucial questions on how far the government can go in providing relief within the AGR framework — questions that could determine the financial trajectory not just of Vodafone Idea, but of the entire telecom sector.