In a significant blow to major telecom players, Vodafone Idea and Bharti Airtel, government insiders have revealed to CNBC TV18 that the possibility of an Adjusted Gross Revenue (AGR) waiver is off the table. Previously, there were discussions about potentially waiving 50% of the interest and fully eliminating penalties related to AGR dues, following requests for government intervention from these telecom giants.

The Supreme Court’s Impact on Telecom Dues

The roots of this situation trace back to a 2019 Supreme Court ruling, which underscored that the telecom sector had long benefited from a revenue-sharing model established by the government. Under this model, telecom operators were obligated to pay licensing fees and spectrum usage charges to the Department of Telecommunications (DoT), calculated as a percentage of their AGR.

• Vodafone Idea faces estimated dues of ₹80,000 crore.
• Bharti Airtel is looking at approximately ₹42,000 crore in liabilities.

Both companies have challenged the Supreme Court’s decision, but their appeals have been consistently denied. The court has turned down their requests for a reevaluation of AGR dues multiple times, including review petitions in 2021 and curative pleas in 2024.

The Waiver: A Missed Opportunity for Relief

The potential waiver was seen as a last-ditch effort for these telecom companies. Reports suggested that it could have offered around ₹1,000 billion in relief to the industry. Specifically, Vodafone Idea could have benefited from about ₹520 billion, while Bharti Airtel could have received roughly ₹380 billion against their respective total AGR dues.

According to sources, the cabinet secretariat has officially communicated the decision regarding the AGR waiver to the Department of Telecommunications. This decision marks a pivotal moment for telecom operators, emphasizing the ongoing financial challenges they face in a competitive market.

Conclusion

As the situation unfolds, the telecom industry is left grappling with significant financial burdens. The lack of a waiver could reshape the future landscape for these companies, affecting their operations and strategic decisions moving forward. The implications of this decision are likely to resonate throughout the sector for years to come.