Telcos face SC headwinds after AGR plea rejected

Telecom companies have suffered a setback with the Supreme Court (SC) dismissing their pleas that seek re-computation of Adjusted Gross Revenue (AGR) dues. Several telcos including big players such as Bharti Airtel and Vodafone Idea had claimed in curative petitions there were inaccuracies in computation of dues by the Department of Telecommunication (DoT), which amounted to over Rs 1 lakh crore.

“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… The curative petitions are dismissed,” a three-judge SC Bench, led by Chief Justice of India DY Chandrachud, said in an order dated August 30 that has been uploaded on September 19.

The telcos have been given 10 years to clear all dues.

The apex court also rejected a plea by the telcos to list the curative petitions for open court hearing. A curative petition, the final legal recourse in the Supreme Court, is normally heard in-chamber.

The companies had filed the petitions after the SC dismissed their pleas for correction of errors in July 2021. Consequently on October 9 last year, the apex court made a note of the submissions from the telcos that sought listing of their pleas.

Meanwhile on Thursday, the stock of Bharti Airtel closed at Rs 1,676.60 on the National Stock Exchange at the end of trading session.

The stock of Indus Towers, India’s biggest mobile tower installation company, dropped nearly 10 per cent to Rs 387.

The debt-ridden Vodafone Idea’s stock traded at Rs 11.02, falling around 14 per cent. Inflow of cash for the company’s debt-raise plan could become more difficult after the court order, especially because the Vodafone’s AGR dues have burgeoned to Rs 70,320 crore at the end of the fiscal year 2023-’24, or FY24.