“In the earlier petitions filed by the telcos, the Supreme Court had dismissed the appeal. Airtel is now on a wait and watch mode,” said one of the five industry executives Mint spoke to for this story.

The executive was referring to August 2024, when the apex court had rejected curative petitions filed by Vodafone Idea and other operators seeking relief in the apex court’s earlier ruling. This was the 2019 order that had upheld the government’s decision on adjusted gross revenues that included earnings from all sources, including non-telecom income such as handset sales. The landmark decision left telecom operators with burgeoning dues, against which the battle is still on.

In May this year, the top court again rejected Vodafone Idea’s plea for a waiver on ₹45,000 crore in interest and penalties on its ₹83,400 crore of AGR dues. Bharti Airtel and Tata Teleservices had also joined Vodafone Idea in the petition that was cancelled by the Supreme Court.

The battle over statutory dues was resurrected when Vodafone Idea moved the top court again a few weeks ago. Their contention was that since the court had on 18 March 2020 locked Vodafone Idea’s AGR dues till 2016-17, based on calculations by the telecom department, why were any other dues demanded all over again. The Supreme Court, in its AGR order, added that no self-assessment or re-assessment of the dues would be permitted.

AGR is the share of a telecom operator’s gross revenue considered for regulatory payments. Operators pay the government 8% of their AGR as licence fee, which includes 5% for Digital Bharat Nidhi that is a fund to boost connectivity in the underserved regions. The AGR dispute hovers around the difference in definition and calculation of this number.

A government official said Airtel has so far not challenged the additional demands. “The additional demand for AGR-related payment was not accounted for at the time of the Supreme Court judgement in 2020,” the official said.

Another industry executive said Airtel will wait to see if Vodafone’s petition gets accepted in the top court. “If the court accepts the appeal, then the telco may join in. But until then, it will not because last time the appeal got dismissed,” the executive said.

Vodafone Idea’s petition is slated to be heard in the top court on 19 September.

Queries emailed to Airtel and the department of telecommunications did not elicit any response till press time.

As of March end, Bharti Airtel’s deferred payment liability towards AGR was at ₹38,604 crore, according to its FY25 annual report. The company has created AGR provisions to the tune of ₹35,211 crore, the probable payment liabilities of Airtel in future. However, of this provision, ₹22,379 pertains to Telenor and Tata Teleservices Ltd, which has merged with Airtel.

In its annual report, the company said it has recognized an indemnification asset towards the said provisions. This means Airtel has the right to receive compensation from Telenor and Tata Teleservices towards this in case any liability arises.

In FY25, the telco which had 362.8 million subscribers and the highest average revenue per user (Arpu) of ₹250 as of end June, increased its AGR provisions by ₹7,516 crore in FY25 up from ₹2,524 crore in the previous financial year. The company has also shown a sum of ₹8,444 crore under contingent liabilities as demands from the telecom department and other regulatory demands and assessments, according to its annual report.

A contingent liability is a possible future expense or loss that might happen, depending on the outcome of an uncertain event. This becomes a provision when it is likely that the company will have to pay and the amount can be reasonably estimated.

“Additional demand received for the period is already covered by the AGR judgement, which mainly pertains to spectrum usage charges,” Airtel said in its annual report for FY25.

In April, Bharti Airtel urged the telecom department to convert some of its AGR dues into equity, which would give the government a 3-4% stake in India’s second-largest telecom operator. In August, the company said it is ready to pay the dues, but it expects the government to extend to it the same relief given to any other telecom operator.

“We have written to the government to extend the same relief as any other telco but that is a decision that the government will take, and we will abide by whatever decision they take,” the company’s vice-chairman and managing director Gopal Vittal had said in an analyst call following the June quarter results. “To that extent, I would say we have the room to make whatever payments are required.”

Vittal’s comments for a level-playing field assume significance, as the government owns nearly 49% stake in Vodafone Idea after converting nearly ₹53,083 crore of dues into equity in two tranches in February 2023 and April earlier this year. However, compared to Vodafone Idea, Airtel has a strong financial position.

The AGR issue has brought significant financial strain for India’s telecom operators. For Vodafone Idea, the telecom department had pegged the dues at ₹58,000 crore, far exceeding the company’s estimate of ₹21,500 crore. For Airtel, the original demand was ₹63,000 crore, including liabilities on acquired spectrum from Tata, Telenor, among others. Tata Teleservices’ dues were put at ₹16,798 crore.