Setback for telecom firms as SC rejects plea to re-compute Adjusted Gross Revenues

In a setback for telecom firms, the Supreme Court has rejected their plea to re-compute Adjusted Gross Revenues (AGRs) in a dispute that has lasted for several years over payment of dues to the government.

A bench comprising Chief Justice DY Chandrachud and Justices Sanjiv Khanna and BR Gavai also rejected the plea of telcos seeking to list the curative petitions for open court hearing. A curative petition is the last legal recourse in the apex court and is generally considered in-chamber unless a prima facie case is made out for reconsideration of the verdict.

"Application for listing the Curative Petitions in open Court is rejected. We have gone through the Curative Petitions and the connected documents. In our opinion, no case is made out within the parameters indicated in the decision of this court in Rupa Ashok Hurra v Ashok Hurra. The Curative Petitions are dismissed," the bench observed in an order dated August 30, which was uploaded on Thursday (September 19).

Plea of telecoms 

In their petition, the telecom companies had raised concerns about how AGR affects their financial viability.

Bharti Airtel, Vodafone India, and other telecom firms filed a petition against a September 2020 court order directing payment of AGR dues over a 10-year period. The order states that the companies have to pay 10 per cent of the total due amount by March 31 every year.

In their petition, the telecom companies claimed that the Department of Telecommunications (DoT) has made a major error in calculating the dues, which include spectrum charges and license fees.

According to news reports, the DoT has stipulated that Airtel owes ₹43,980 crores and Vodafone owes ₹58,254 crores to the government.

However, the firms say that according to their calculations, Airtel owes only ₹13,004 crores and Vodafone ₹21,533 crores.

The DoT also made similar recalculations against dues owed by Tata Teleservices.

Basis of dispute

The government receives money for allotting licenses and spectrum to the firms.

The DoT calculates the government’s share as a percentage of the AGR – 8 per cent as license fees, and 3-5 per cent in spectrum usage fees.

The dispute is over how the AGR is calculated.

The telecom firms say it must include only core revenue, while the DoT includes all revenue, including the revenue from non-telecom channels.

SC judgement in 2019

In 2019, the SC ruled against the telecom firms, and told them to pay ₹92,000 crores within 180 days.

This court order was a major hit to the telecom industry, and both Bharti Airtel and Vodafone India posted record losses.