Want to show DoT error in AGR dues calculation: Telcos to SC

Telcos have asked the Supreme Court for permission to show the telecom department that ‘arithmetical errors’ were committed while computing their adjusted gross revenue (AGR) dues, while asserting that they were not seeking a review of the original SC judgment.

At a hearing in the Supreme Court on Monday, Vodafone Idea, along with Bharti Airtel and Tata Teleservices (TTSL), highlighted errors made by the Department of Telecommunications (DoT) while calculating AGR dues, which had led to inflated demands. The telcos had filed separate pleas in January, seeking a modification of the top court’s September 20, 2020 order which had declared DoT’s AGR calculations as final.

A three-judge bench headed by Justice LN Rao and comprising Justice Abdul Nazeer and Justice MR Shah reserved its verdict. The bench observed that it was only looking at the bar on re-assessment of the AGR dues.


“All I am saying is that the liability is spread over 20 years, but there are some arithmetical entries. If I have paid Re one, only 50 paise is reflected. Some cheques are not reflected. We want to place these entries before DoT,” said senior advocate Mukul Rohatgi who was representing Vi. “We are not a fly-by-night operator. Let DoT see the errors. Let them see, if they agree, we will get some rebate.” He added that the AGR amounts are “not cast in stone” and that while several tribunals don’t have the power of review, they do have the power to correct arithmetical errors.

Cash-strapped Vodafone Idea — with a debt of Rs 1.8 lakh crore and a cash balance of Rs 350 crore — has linked its viability to reduction in the AGR dues, along with other factors.

At its fiscal fourth quarter earnings call, the telco said it expected some relief from the SC which will reduce its AGR dues to nearly half.

The telecom JV between UK’s Vodafone Group Plc and India’s diversified conglomerate Aditya Birla Group, was the hardest hit by the Supreme Court order of October 2019, which widened the scope of AGR to include non-telecom items.

A year later, the top court held that DoT’s AGR calculations were final, scrapping self-assessments done by the telcos. Vi had self-assessed its dues at Rs 21,533 crore, while Airtel and Tata Tele estimated their dues at Rs 13,003 crore and Rs 2,197 crore, respectively.

The ruling left Vi facing dues of Rs 58,400 crore, Airtel with Rs 43,980 crore and Tata Teleservices with Rs 16,798 crore dues, as calculated by the government. Of these, Vi has paid Rs 7,854 crore, Airtel Rs 18,003 crore and Tata Tele Rs 4,197 crore. The telcos need to pay their balance dues in 10 instalments through March 31, 2031.

Arguing for Airtel, senior advocate Abhishek Manu Singhvi highlighted the duplication in DoT's calculations. “Purely by oversight, some payments, deductions are not taken into consideration by DoT. Now, I don’t want to pay thousands of crores due to these errors,” he said.

Tata Tele, represented by senior advocate Arvind Datar, said that clerical errors are inevitable given the size of operations and sheer number of people involved. “Rectification is a matter of right in any assessment,” he added.

On being asked by the bench for the government’s response to the telcos’ appeals, solicitor general Tushar Mehta said he had no instructions and that he would need two days to reply since the Parliament was in session.

For Vi, no recalculation will mean its AGR EMI will be around 60% of 2022 cash Ebitda, driving it to a financial crisis, said brokerage CLSA. It added that to cover the AGR EMI, Vi will need an average revenue per user of Rs 170, or 40% higher than in 4QFY21, mandate multiple tariff hikes or shutdown operations.