Vodafone Idea (Vi) and Bharti Airtel are not going to see any reductions in the AGR (adjusted gross revenue) dues that they need to pay to the DoT (Department of Telecommunications). The two telcos had moved to the Supreme Court (SC) and filed review petitions to overturn the SC's earlier order in 2021 which refused the AGR amount to be corrected or changed because of an alleged miscalculation of the AGR amount by the telecom department. Now, the SC has dismised the review petitions filed by Vodafone Idea and Bharti Airtel, as reported first by ET.
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Now, the telecom operators have no other legal options left to get their AGR dues reduced. The decision will now help lenders to make up their mind about whether they want to expose themselves further to Vodafone Idea Limited. At the same time, Vi is expecting more help from the government in the AGR dues matter. Even if the government can't reduce the AGR dues or recalculate it, the dues can be pushed away further.
In 2021, the government had announced a moratorium period for the AGR dues, which is due to end in FY26, only a few months from here. It is very likely that the government will extend the moratorium period further. This will allow Vi to focus on network expansion plans. The telco has been paying off bank dues pretty fast with the revenues it is generating and the funds raised are going towards capex.
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A major part of the Rs 55,000 crore capex projection announced by Vi for the next three years depends on the lenders providing additional loans. This would totally depend on the government's support to Vi in the AGR dues matter. Whatever benefit Vi will get from the government in the AGR dues, it will automatically translate into a fortune for already profitable Bharti Airtel.
